Show that the demand function, Q=aP^b ,
a. Is a constant elasticity demand curve.
b. The vertical distance between the (inverse) demand and marginal revenue curves is a constant ratio of the price level for each value of quantity
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Show that the demand function, Q=aP^b , a. Is a constant elasticity demand curve. b. The...
Consider the constant-elasticity demand function Q = p^−ε, where ε > 0. a. Solve for the inverse demand function p(Q). b. Calculate the demand price elasticity. c. Show that p(Q)/MR(Q) is independent of the output level Q. (Hint: Use the relationship between marginal revenue and the elasticity of demand.)
Suppose that you believe that the demand curve is a constant
elasticity demand curve:
Q=Ape,
..............................................
Score: 0 of 1 pt 8 of 11 (7 complete) HW Score: 54.55%, 6. Text Question 4.2 EQuestion Help Suppose that you believe that the demand curve is a constant elasticity demand curve: Q Ap where A is a positive constant and e is the constant elasticity of demand. You have some data and want to estimate a constant elasticity demand curve: where A...
Suppose a monopolist faces the constant price elasticity demand curve: p = Q? where ? < 0. The monopolist has a constant marginal cost of c. a. If ? < -1, can you determine what price and quantity will the monopolist set? Explain. b. If 0>?>-1, what is the price and quantity the monopolist will set?
The price elasticity of demand for a downward sloping straight line demand curve is: a. constant as the price changes along the curve b. a number ranging from negative infinity to positive infinity c. given by the ratio of price and quantity d. lower in absolute value as the price drops along the curve
please answer part A AND B!!!!
Let's assume a firm's inverse demand curve and cost equation is given below: P = 175-2Q C400+50QQ (a) Find the optimal quantity, price, and profit (b) With quantity on the x-axis and price on the y-axis, graph the inverse demand, marginal revenue, and marginal cost curves. Show the optimal price and quantity on the graph.
1. Assume that the demand curve is given by Q = 1000 – 0.25P. What is the inverse demand curve? B) Using the inverse demand curve you solved for in 1, solve for the total revenue for this Monopolist. C) Using the total revenue curve you solved for in 2, solve for the marginal revenue curve. D) Assume that Marginal costs are given by 100 + 2Q. What is the profit-maximizing quantity and price for the monopolist? E) Now, turn...
1. Let demand be P(Q) = 6 - 2. What is the price elasticity of demand at Q = 4? a. E = C. b. E= E = -4 d. E= -2 2. Suppose we have 3 types of households each with private demand for a public good (like flood protection) of P1(Q) = 5, P2(Q) = 10 - Q, and P3(Q) = 20 – 2Q. What is the social demand curve for the range Q < 10? a. Ps(0=...
1. The inverse demand function for a good takes the constant elasticity form p(Q) = Qβ , −1 < β < 0, which is a commonly used simple functional form. The good is produced by n identical firms with a cost function c(qi) = cqi . Note that c 0 (qi) = c and c 00(qi) = 0; i.e., there are constant marginal costs. A specific tax of t per unit is imposed on the production of the good. (a)...
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5. The Zenith television company faces a demand function for its products which can be expressed as Q-4000 - P+0.5Y where Q is the number of televisions, P is the price per television, and is average monthly income. Average monthly income is currently equal to RM2,000 1. Express the inverse demand curve faced by Zenith at the current income level. [2 marks) At what price and quantity is Zenith's total revenue (TR)...
Consider a monopolist firm facing an inverse demand curve given by P(Q) 2700-9Q. The firm's total cost is given by c(Q) 11,000+900Q (a) Show your work in solving for the firm's profit-maximizing quantity and price. What is (b) Plot this firm's revenue and total cost functions. Illustrate the profit-maximizing quantity (c) Now plot this firm's inverse demand, marginal revenue, and marginal cost curves. Il- the maximized value of profit? on this graph, as well as the firm's maximized profit level....