Microeconomics
21st Edition
ISBN: 9781259915727
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Question
Chapter 12, Problem 3RQ
To determine
Marginal revenue, total revenue, elasticity of demand .
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Consider the demand function:
where q = quantity, p = price
d)
Q = 2p²60p + 700
n
For what values of p is demand (i) elastic; (ii) inelastic? What is the
effect of a small price reduction on Total Revenue, when demand is
(i) elastic; (ii) inelastic?
e) Sketch the graphs of the Demand function, Total Revenue and
Marginal Revenue as functions of p.
Explain, using words and diagrams only, the relationship between
Marginal Revenue and the Elasticity of Demand.
Q 2. i) How can we differentiate Elastic and Inelastic Price
Elasticity of Demand?
ii) Calculate Total Revenue (TR), Marginal Revenue
(MR) and Average Revenue (AR) for the following set of
data.
Quantity
Price
Total
Marginal
Revenue
Revenue
80
1
76
2
72
3
68
4
64
5
60
6
56
7
52
8
48
44
If price increases what will be the effect on Total Revenue
(TR) in case of
a) Elastic, b) Inelastic & c) Unitary Elastic Price
Elasticity of Demand?
4. In one month, a beef burger restaurant sold 2,500 personal beef burger at $2.50 per pizza.
When this restaurant increased its price by 20%, its total revenue for the next month
increased to $12,500. As a result of this price increase, however, the monthly sales of
chicken meat decreased from 2,500 slices to 2,000 slices. Using the arc elasticity method,
a) find the price elasticity of demand for this restaurant's beef burger; and
b)
find the cross-elasticity of demand for chicken meat with respect to the price of
burger. Comment on your result.
Chapter 12 Solutions
Microeconomics
Ch. 12.4 - The MR curve lies below the demand curve in this...Ch. 12.4 - Prob. 2QQCh. 12.4 - Prob. 3QQCh. 12.4 - Prob. 4QQCh. 12 - Prob. 1DQCh. 12 - Prob. 2DQCh. 12 - Prob. 3DQCh. 12 - Prob. 4DQCh. 12 - Prob. 5DQCh. 12 - Prob. 6DQ
Ch. 12 - Prob. 7DQCh. 12 - Prob. 8DQCh. 12 - Prob. 9DQCh. 12 - 10. LAST WORD Using Big Data to set personalized...Ch. 12 - Prob. 1RQCh. 12 - Prob. 2RQCh. 12 - Prob. 3RQCh. 12 - Prob. 4RQCh. 12 - Prob. 5RQCh. 12 - Prob. 6RQCh. 12 - Prob. 7RQCh. 12 - Prob. 1PCh. 12 - Prob. 2PCh. 12 - Prob. 3PCh. 12 - Prob. 4PCh. 12 - Prob. 5P
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