Which of the following statements about the relationship between marginal revenue, price, and the price elasticity of demand, is true? a)  At the midpoint of a linear demand curve, the value of price elasticity of demand is zero. b)  With a perfectly elastic demand curve, whatever output the firm produces, the marginal revenue is always greater than the market price. c)  If the price elasticity of demand PED = -1 at all points on a demand curve, then the firm can choose any level of output, and earn the same revenue. d)  If a firm has inelastic demand, then the marginal revenue curve will be upward sloping.

1. Given the supply function P = Q2 - 6Qs +15. a) Find the expression for the elasticity of the supply in terms of Q. b) Find the level for which the supply is unit elastic. c) Find the elasticity at Q= 2 and discuss. d) Find the percentage change in supply due to 10% decrease in price at current level of output of 2.

A firm with pricing power (i.e. a price-maker) estimates that the elasticity of demand for its product is __A= -3.50___. To maximize profits by what percentage above cost should it markup its price?

Problem 4. The price is a function of demand given as p(q) = 2.5 ln(300). Use the elasticity function to find the price for this product that generates the highest revenue.

Explain classification of linear supply functions by types of elasticities.

The demand curve for product a is given as Q = 2000 - 20P. a. How many units will be sold at $10? b. At what price would 2,000 units be sold? 0 units? 1,500? c. Write equations for total revenue and marginal revenue (in terms of Q). d. What will be the total revenue at a price of $70? What will be the marginal revenue? e. What is the point elasticity at a price of $70? f. If price were to decrease to $60, what would total revenue, marginal revenue, and point elasticity be now? g. At what price would elasticity be unitary?

Suppose that over a range of prices, the price elasticity of demand varies from 15.0 to 2.5. Over another range of prices, the price elasticity of demand varies from 1.5 to 0.75. What can you say about total revenues and the total revenue curve over these two ranges of the demand curve as price falls?

The demand function for product is p = -4q+400 and the average cost for producing q units 500 is c = 37q + 40 + where p= price, and q= quantity demand. 2 9 1. 2. 3. 4. Compute the point elasticity of demand and find the intervals where the demand is inelastic, elastic, and the price for which the demand is unit elastic. Find the quantity that maximizes the total revenue and the corresponding price. Interpret your result. Find the quantity that minimizes the average cost function and the corresponding price. Interpret your results. What are the quantity and the price that maximize the profit? What is the maximum profit? Interpret your result.

Demand curve is perfectly elastic in case of which market structure

Suppose that at the equilibrium price and quantity, the marginal revenue is -$15 and the price elasticity of demand for a linear demand function is -0.75. Then we know that the equilibrium price is: -$45. $5. -$5. $45.