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d) Consider a demand curve given by P = AQ 0.25 where P and Q represent price and quantity demanded respectively, and A is a positive constant. Show that the price elasticity of demand is constant, for all values of A, and is always equal to 4. Find the marginal revenue function and sketch the demand curve and its associated marginal revenue curve.

d) Consider a demand curve given by P = AQ 0.25 where P and Q represent price and quantity demanded respectively, and A is a positive constant. Show that the price elasticity of demand is constant, for all values of A, and is always equal to 4. Find the marginal revenue function and sketch the demand curve and its associated marginal revenue curve.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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d) Consider a demand curve given by P = AQ 0.25 where Pand Q represent price and quantity demanded respectively, and A is a positive constant. Show that the price elasticity of demand is constant, for all values of A, and is always equal to 4. Find the marginal revenue function and sketch the demand curve and its associated marginal revenue curve.
Transcribed Image Text:d) Consider a demand curve given by P = AQ 0.25 where Pand Q represent price and quantity demanded respectively, and A is a positive constant. Show that the price elasticity of demand is constant, for all values of A, and is always equal to 4. Find the marginal revenue function and sketch the demand curve and its associated marginal revenue curve.
a) If a business has a long-run cost (TC) function given by TC = aq^3 - bq^2 + ca %3D where q = the rate of output, and a, b and c are all positive parameters, show that average cost is always positive if and only if b^2 < 4ac and a >0.
Transcribed Image Text:a) If a business has a long-run cost (TC) function given by TC = aq^3 - bq^2 + ca %3D where q = the rate of output, and a, b and c are all positive parameters, show that average cost is always positive if and only if b^2 < 4ac and a >0.
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