Question

1. Let profit be Π = TR – TC = (140*Q - .30*Q2) – (20*Q1.2). What...

1. Let profit be Π
= TR – TC = (140*Q - .30*Q2) – (20*Q1.2). What is total revenue when profit is maximized?

A.

TR= 6,473.23.
B.

TR= 8,292.43.
C.

TR= 9,235.61.
D.

TR= 10,432.42.
E.

TR= 12,992.46.

2. Consider the multiplicative demand function Q = 4*P-1.2. Suppose price is reduced from 8 to 7. What is the marginal effect on quantity demanded of the one unit change, that is, what is ΔQ from the one (1) unit change in P from 8 to 7?

A.

.057.
B.

.034
C.

.11.
D.

.31.
E.

1.2.

3. Consider the demand function Q = 900*P-2.0. We can write total revenue as TR = P*Q. Suppose the firm is considering reducing price from P = 4.5 to P = 4.4. What is the marginal revenue MR = ΔTR/ΔQ from this price change?

A.

1.52.
B.

1.67.
C.

1.98.
D.

2.07.
E.

2.22.
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