Demand for Nuts is given by Q = 50 – 2P. (Not that dQ/Dp= - 2) 1)Calculate the price elasticity of demand. 2)At what price-quantity combination is revenue from sales of nuts maximized? Why? Show your mathematical work. Illustrate by graphing total revenue. 3) A report published in Science magazine shows that eating nuts is correlated with high levels of blood cholesterol. How would this affect the demand for nuts? The revenue maximizing amount of nuts?
Demand for Nuts is given by Q = 50 – 2P. (Not that dQ/Dp= - 2) 1)Calculate the price elasticity of demand. 2)At what price-quantity combination is revenue from sales of nuts maximized? Why? Show your mathematical work. Illustrate by graphing total revenue. 3) A report published in Science magazine shows that eating nuts is correlated with high levels of blood cholesterol. How would this affect the demand for nuts? The revenue maximizing amount of nuts?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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1)Calculate the
2)At what price-quantity combination is revenue from sales of nuts maximized? Why? Show your
mathematical work. Illustrate by graphing total revenue.
3) A report published in Science magazine shows that eating nuts is correlated with high levels of
blood cholesterol. How would this affect the demand for nuts? The revenue maximizing amount of
nuts?
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Introduction
Here we are given the demand function and using that we will calculate the total revenue and the elasticity of demand.
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