Question

Assume that the demand function for tuna in a small coastal town is given by p = 20,000 q1.5 (200 ≤ q ≤ 800), where p is the price (in dollars) per pound of tuna, and q is the number of pounds of tuna that can be sold at the price p in one month.

(a) Calculate the price that the town's fishery should charge for tuna in order to produce a demand of 400 pounds of tuna per month.

(b) Calculate the monthly revenue R (in dollars) as a function of the number of pounds of tuna q. R(q)

(c) Calculate the revenue and marginal revenue (derivative of the revenue with respect to q) at a demand level of 400 pounds per month.

Answer 1