Question

Quantity Price (dollars) $7.50 7.00 6.50 6.00 5.50 5.00 Total Revenue Marginal (dollars) Revenue $7.50 7.50 14.00 19.50 15.50 24.00 4,50 27.50 3.50 30.00, 2.50 a. Fill the rest of the marginal revenue column (0.5 point) b. Draw the demand curve and label the axes for quantities 3 and 4 and the related prices. (ust like I showed you in class) (1 point) c. Calculate the price effect when quantity increases from 3 to 4 units. Be careful about the signs on these numbers (0.5 point)

Answer 1

Quantity Price (&) 7.50 7.00 6-50 6.00 5.50 Total Revenue $7.50 14.00 19.50 24.00 27.50 marginal Revenue CA 7.50 boso 5:50 4.50 3.50 2.50 Soo 30:00 1 * marginal Revenue = change in Total Revenue Change in Quantity MR = STRI 6 Equation of demand. р-Р, В - Р, Q-Q, A2-QI » P-7.50 -7.00-7:50 Q-1 2-1 (P,= 7.50 1 Q,1 P2 = 70. Q222 -) (P-7.50 ) 2 = -Q+1 2P-15 = -Q+1 =2P+ Q = 16 -0 Equation of DD

6.50 - to Equation of DD ( 2P+Q=16) by - 6.oof t o Lodh Tico Q 0 price effeel- when Quantity increases from 3 to 4 be At Q,= 3, P = 6.00 At Q2 = 4 h = 6-50 price effel-= ? - Pi = 6.50-6.00 =$.50 price effed =$1 It mean Quantity is increase increases to $ % from 3 to 4 the price I tue impact good) that is NORMAL