Question
Calculate elasticity values for part a (Must: show all calculations):
- Calculate elasticity values for part a (Must: show all calculations): [2 + 2 = 4]
- Suppose firm XYZ (selling good x) has calculated its demand function from its past data & related variables and it arrives at the following demand function:
Qx = 2600 – 10 Px – 2Py + .04I
Where: Px, Py and I stand for price of good x, price of related good y and average income.
If given values are Py = Rs. 200 and I = Rs. 2000, then:
- Write the equation for demand curve for good x.
- At Px = Rs. 50, what is the TR of the firm?
- At the same price level, what is the MR of the firm?
- If the income increases to Rs. 2500, then what extra demand will be created?
- If the demand curve for a firm ABC for item A is given by: QA = 600 – 1.2 Pa , then*:
- At what quantity & price value will the firm maximize TR or total revenue?
- What is the maximum TR that can be achieved by the firm on this demand curve?
- What is the MR or marginal revenue at this point?
*Derive all answers from the demand curve function given and show all steps.
Homework Answers
Answer #1
Not the answer you're looking for?
Similar Questions
The demand curve for potatoes is given by: QX = 1,000 +0.3I - 300 PX +...
The demand curve for potatoes is given by:
QX = 1,000 +0.3I - 300 PX + 200 PY,where QX = Annual demand in
pounds
I = Average income in dollars per year
PX = price of potatoes per pound,
PY = price of rice per pound.
(a) (1) Discuss whether potato is a normal good or an inferior
good.
(b) (1) Suppose I = $10,000: What would be market demand for
potatoes?
(1) Determine whether X and Y are substitutes...
(b) If the demand curve for a firm ABC for item A is given by: QA...
(b) If the demand curve for a firm ABC for item A is given by:
QA = 600 – 1.2 Pa , then*: i. At what quantity & price value
will the firm maximize TR or total revenue? ii. What is the maximum
TR that can be achieved by the firm on this demand curve? iii. What
is the MR or marginal revenue at this point?
The equation below represents a linear demand curve. Use the grid (right) for your plots. Write...
The equation below represents
a linear demand curve. Use the grid
(right) for your plots. Write
all derivations in the space
below.
l) Plot the demand function on the
top set of axes. Your demand function is:
Qx =
80,000-200Px
2) The price function is the inverse
of the demand function. Write this inverse below.
3) Use the price function to obtain
the total revenue function (TR). Write the TR function below. You
will plot TR on the lower set...
The demand for your product X has been estimated to be QX =7,880−4PX −2PY +PZ −0.1M...
The demand for your product X has been estimated to be QX
=7,880−4PX −2PY +PZ −0.1M
where Y and Z are other (related) products. The relevant price
and income data are as follows:PX =10,PY =15,PZ =50,M=40,000
a. Which goods are substitutes for X? Which are complements?
b. Is X an inferior or a normal good?
c. How much X will be purchased?
d. Graph the demand curve for X given the above information.
e. How will the demand curve change...
1) Answer 1-3 based on the Demand curve for normal good X is given by Qd...
1) Answer 1-3 based on the Demand curve for normal good
X is given by Qd = 40,000 - 10,000Px The Total revenue (TR)
function based on the above demand is TR = 4Q -
0.0001Q2
A) True
B) False
2) Based on the above, the Marginal Revenue, MR,
function is MR = 4 - 0.0002Q
A) True
B) False
3) Based on the above, TR is maximized at Q = 20,000
units
A) True
B) False
4) 55.57% of...
. You have computer a market demand curve for X and it looks like this: QXd...
. You have computer a market demand curve for X and it looks
like this: QXd = 30,000 -20PX - 8PY + 0.5M where PX is the price of
X PY is the price of a related good Y M is the income of the buyers
in the market. What can you say about the demand from good X from
this demand curve?
Given the above demand curve, how many of good X will consumer
purchase when PX is $100...
The market demand for brand X has been estimated as Qx = 1,500 - 3Px -...
The market demand for
brand X has been estimated as
Qx = 1,500 - 3Px -
0.05I - 2.5Py + 7.5Pz
where Px is
the price of brand X, I is per-capita income,
Py is the price of
brand Y,
and Pz is the price of brand Z. Assume that
Px = $2, I = $20,000,Py = $4, and
Pz = $4. a. With respect to changes in per-capita income,
what kind of good is
brand X?
b. How are...
Suppose the relationship between Demand for good x (Qx) can be described by the following linear...
Suppose the relationship between Demand for good x (Qx) can be
described by the following linear relationship (Py: price of good
y, I = income):
Qx= 120 – 6Px + 5Py + 3 I
From the demand relationship above, you can conclude: Goods X
and Y are substitute/complementary goods
because_______________________, and a decrease in Py would cause
quantity demanded/demand of Good X to increase/decrease.
Suppose Py = $5 per unit, and I = $10, and Px = $20. At these...
QXd = 30,000 -20PX - 8PY + 0.5M where PXis the price of X &n
QXd = 30,000
-20PX - 8PY +
0.5M
where PXis the price of X
PY is the price of a related good
Y
M is the income of the buyers in the market.
Given the above demand curve, how many of good X will
consumer purchase when PX is $100 a unit,
PY is $50 a unit, and M is
$25,000?
Which of the following is true for Beta Company with demand function for its product X,...
Which of the following is true for Beta Company with demand
function for its product X, “QX = 1000 – 5PX - 0.03I + 0.2PY,”
where QX = quantity of X sold, PX = price of X, I = consumers’
average income, and PY = price of product Y?
a) X is an inferior good and a substitute to good Y.
b) X is an inferior good, and a complement to good Y.
c) X is a normal good, and...
ADVERTISEMENT
Need Online Homework Help?
Get Answers For Free
Most questions answered within 1 hours.
ADVERTISEMENT
Active Questions
asked 17 minutes ago
asked 29 minutes ago
asked 30 minutes ago
asked 55 minutes ago
asked 55 minutes ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago