demand function P=2,000-50Q
a) to sell 20 units of Q, what price would have to be charged?
is this P=1000?
b) if firm sets a price of $500, how many units of Q would be sold
Q=30?
c) what is the price elasticity of demand if price equals $500
.06?
d) at what price if any, will the demand of Q be unitary elastic
this one i just dont know how to do
any help would be greatly appreciated
2007-07-09 17:27:27 · 1 answers · asked by jake p 2 in Social Science ➔ Economics
a and b are correct
c price elasticity equals change in Q divided by change in P
at $500 Q is 30, at $450 Q is 31
1/30 = change Q
50/500 = change P
d) I had to plot in a lot of quantities and prices. Knowing that total revenue would be at the maximum when unitary elastic. I calculated
15Q x $1,250p = $18,750
20Q x $2,000p = $20,000
25Q x $750p = $1,8750
So maximum is 20 Q calculate elasticity and it is = 1
2007-07-09 18:52:00 · answer #1 · answered by JuanB 7 · 0⤊ 0⤋