1. Consider the following: If the price per unit of good A is P200 quantity purchased is valued at 1,500 units. If price changes (increase or decrease) by P1, quantity demanded changes (decreases or increases) by 4 units. A. Determine the demand function expressed as a price function. B. Set up a demand schedule for this function and determine the price elasticity of demand at various P and Qd combinations using point-price elasticity formula. (Make sure that all elasticity concepts are found on the same demand curve.) C. Determine the TR and MR functions.
1. Consider the following: If the price per unit of good A is P200 quantity purchased is
valued at 1,500 units. If price changes (increase or decrease) by P1, quantity demanded
changes (decreases or increases) by 4 units.
A. Determine the demand function expressed as a price function.
B. Set up a demand schedule for this function and determine the price elasticity of
demand at various P and Qd combinations using point-price elasticity formula.
(Make sure that all elasticity concepts are found on the same demand curve.)
C. Determine the TR and MR functions.
D. Graph the demand curve and the TR curve (TR curve just below the demand curve)
E. At what P and Qd combination will TR be maximum?
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