Suppose the demand curve is QD = 400 - 5P 1) Compute the price elasticity of demand at QD= 15 and at QD= 375 2) Is the point elasticity elastic or inelastic? 3) How much is total revenue at QD= 15 and at QD= 375
Suppose the demand curve is QD = 400 - 5P 1) Compute the price elasticity of demand at QD= 15 and at QD= 375 2) Is the point elasticity elastic or inelastic? 3) How much is total revenue at QD= 15 and at QD= 375
Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter7: Consumer Choice And Elasticity
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Problem 13CQ: Suppose Erin, the owner-manager of a local hotel projects the following demand for her rooms: a....
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![Suppose the demand curve is Qp = 400 - 5P
1) Compute the price elasticity of demand at QD= 15 and at QD= 375
2) Is the point elasticity elastic or inelastic?
3) How much is total revenue at Qò= 15 and at QD= 375
4) Is total revenue maximised? Why?
Tip: Use the elasticity to calculate marginal revenue](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9d6686f0-24e3-43de-bc21-a827730605bb%2F6324c413-abd9-48ba-bbf7-acb29f6ab58a%2Ffaqmyk_processed.png&w=3840&q=75)
Transcribed Image Text:Suppose the demand curve is Qp = 400 - 5P
1) Compute the price elasticity of demand at QD= 15 and at QD= 375
2) Is the point elasticity elastic or inelastic?
3) How much is total revenue at Qò= 15 and at QD= 375
4) Is total revenue maximised? Why?
Tip: Use the elasticity to calculate marginal revenue
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