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Please answer 6 and 7. Question 3 and 4 are referenced for the questions asked. Thank you! 4. (20 points) Consider the demand function D(p;m) mP, where > 0 is consumers average income. The supply consists of a monopoly, whose revenue from sales is given by R(p;mpD(p;m) (a) (5 points) Compute the elasticity function, E(p;m)-D(p;m) b) (5 points) Find the value of p such that E(p; (c) (5 points) Compute the marginal revenue function, MR(p; m) R(p; (d) (5 points) What is the solution to the equation MR (p 0? Compare 1 your answer to your answer from part (a)6. (10 points) Consider the utility function from Problem 3 with θ 1. eU(q) - 2-2. This consumers demand is as in Problem 4, with income 100 D(p) 100e P. His indirect utility, V(p), is V(p)-U(D(P)). Compute V(p). 7, (10 points) Repeat problem 6 but with θ and m as a parameters. For u(z θ) 1-0 and D(p;m) --me-r, the consumers indirect utility is V(p;θ, m) ;m);); compute u(D(p V(p:0, m).1-8-1 3. (10 points) Consider the utility function u(q:0)-T-01, where 0 < θ < 1 is a 1-e utility parameter. (a) (5 points) Compute the marginal utility function, MU(g0)-U(q:e b)(5 points) Show that MU(g:0) is decreasing.

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and 4 - LO) with 2. m e U (D -분

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