Question: 1. Demand is given by Q(P) : 200 5P (a) Calculate Q'(P) (b) Use the rst-order condition to solve for the price P' that maximizes

1. Demand is given by Q(P) : 200 5P (a) Calculate Q'(P) (b) Use the rst-order condition to solve for the price P' that maximizes revenue: MP) = (as?) - P (c) Use the second-order condition to conrm that P\" is a local maximum ((1) Calculate the price elasticity of demand: 5(P) : Q' (P) - 5 (9) Calculate the price elasticity of demand at P\" (f) Is demand elastic1 inelastic, or unit-elastic at P\"? How do you know? (g) Now suppose demand is Q(P) I 200 cP, where c is a constant > 0. Calculate Q'(P), P', and the price elasticity of demand at P

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!

(1-t) ((A - B . y)y - y' /2) as after-tax profit for the firm. Once again, find the firm's profit-maximizing quantity of output and the resulting price. What effect does the profits tax have on the...

solve these as soon as possible Suppose there are 45 identical firms in the perfectly competitive note card industry. Each firm has a short run total cost curve of the form: STC = =1/; ed q' -11q2 +...

Necessary information has been given for the following questions. Consider the following Diamond economy (Le., the Overlapping Generations Model: OLG). In every period f with t = 0, 1,2, .., there...

Please help with this homework question Question 2 (5 marks total) Two firms are engaging in price competition. Firm 1 has the cost function c (41) = 89, for all 41 > 0 and Firm 2 has the cost...

Please help me with this Two firms are engaging in price competition. Firm 1 has the cost function ci(91) = 8q1 for all 41 >0 and Firm 2 has the cost function c(q2) = 2q2 for all q2 > 0. Firm 1 and...

You will work on this in groups in your discussion section, then finish it on your own afterwards. In particular, you must write all of the solutions for your final version by your- self. Working...

Hello may you help me solve these SP10.1 Price discrimination Valair is an airline flying a particular route that has seasonal demand. The firm's total demand is given by: Q = 600 - 4P (10.5) where Q...

A.. The short-run aggregate supply curve may shift to the left if: a inflationary expectations increase. b productivity increases. c government spending increases. d personal income taxes decrease. e...

A. B. A. B. ( ( ) ) Beginning and Intermediate Algebra An open source (CC-BY) textbook Available for free download at: http://wallace.ccfaculty.org/book/book.html by Tyler Wallace 1 ISBN...

Key Success Factors and Current Industry Prospects: Key Success Factors Key success factors (KSFs) are the competitive factors in the marketplace that affect an industry member's ability to survive...

Consider an individual who must drive to his place of work. Assume that there are 16 available hours in the day, that his wage rate is $20 per hour, and that he has non-labour income of $100 per day....

The goal of this mini-project is to help you verify the Rule for Sample Proportions firsthand, using a physical simulation. You will use the population represented in Figure 19.1 to do so. It...

Closing case a job at East coast yachts part 1 1 . What advantages do the mutual funds offer

Different inventory models are widely used on managing inventory. From the following statements, which one is not true with respect to the inventory models" Inventory models is concerned with how...

4. Select a person you want to model. Choose what you want to model in this person, such as relationship skills. a. Observe what he does and how he does this in relationships with others. b. Try to...

2. Start with a person you want to model. a. Use the five positions to investigate how this person positions himself in relation to others, i.e. how he uses the five positions in his interaction with...

1. Start with a leader that you want to model. a. What is the stated purpose of this person? b. What is the vision of this person? c. How does he seek to achieve his purpose and vision? d. What does...