Find equation for Total Revenue Find equation for Marginal Revenue

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Presentation transcript:

Find equation for Total Revenue Find equation for Marginal Revenue Demand Curve Q = 5000 – 10P Find equation for Total Revenue Find equation for Marginal Revenue

Q = 5000 – 10P Find price and quantity at which Total Revenue is maximized. What is the level of maximum revenue

Demand Curve Q = 500 – ½ P A) calculate the point elasticity of demand when price is $100 B) calculate the point elasticity of demand when price is $700 C) Find the point at which point elasticity of demand is equal to -1

Regression equation Q = 15,000 – 10P + 1500A + 4Px 2I Standard errors of the coefficients are 5234, 2.29, 525, 1.75, 1.5 P is price; A is advertising, Px is price of competitor’s product, I is income R squared is 0.65 A) calculate the t-statistics and explain B) should this firm be concerned if forecasters predict a recession

Demand equation Q = 500 – 25P Supply equation Q = -250 + 50 P A) what is the equilibrium Price and Quantity in this market

Demand equation Q = 31,000 -2000P Supply Equation Q = 10,000 + 1500P A) If the price was $7.00, what would result?

Demand equation Q = 400 – 10P Supply equation Q = -200 + 20P If the price is $15, what will be the result in this market?

Demand equation Q= 1500 – 100P + 75Px + 1.5I + 0.6A If Px is $40.00, I is $2500, A is $5000: what is the Total Revenue equation? What is the Marginal Revenue equation?

You raise the price of your product by 40% You raise the price of your product by 40%. The quantity demanded does not change. What does this tell you about the demand for your product?

If the income elasticity of a good is greater than 0 but less than 1: What type of good is this?

The price of product X has just increased by 20% The price of product X has just increased by 20%. Product Y’s sales decrease as a result. What does this tell you about the two goods?

Demand equation Q = 5000 -250P + 120Px +0. 04I If Px is $50 Demand equation Q = 5000 -250P + 120Px +0.04I If Px is $50.00, and I is $60000 A) What is the demand curve? B) What is the Average Revenue (Price) equation? C) What is the Total Revenue Equation? D) What is the Marginal Revenue Equation? E) At what quantity is MR = 0?