Your first assignment is to determine the demand curve and the marginal revenue curve for the new Schwinn elliptical machine. You conduct a price experiment and have accumulated the following data:
You have just been hired as the assistant manager at the local SportChek. Your first assignment is to determine the demand curve and the marginal revenue curve for the new Schwinn elliptical machine. You conduct a price experiment and have accumulated the following data:
| Week | Price | Quantity Sold |
| 1 | $1000 | 1 |
| 2 | $700 | 4 |
| 3 | $800 | 3 |
| 4 | $500 | 6 |
| 5 | $600 | 5 |
| 6 | $900 | 2 |
a)
To start, sort the table by quantity sold, and draw the firm demand curve for elliptical
machines at your store – don’t forget to label it appropriately.
| Price | Quantity | Total Revenue | Marginal Revenue |
b)
Calculate the total revenue and marginal revenue for each quantity of output, then graph the marginal revenue curve on your demand curve.
c) Do you have enough information to determine the price that you should recommend charging? If yes, what price would maximize profits? If no, what additional information do you need?
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