1. Assume that the quarterly demand and supply functions for personal computers
ID: 1092636 • Letter: 1
Question
1.
Assume that the quarterly demand and supply functions for personal computers are
QD = 340 - 6P
QS = 100 + 2P
(1) What is the equilibrium price for personal computers?
(2) What is the equilibrium uantity for personal computers?
7.
The David Company's demand curve for the company's product is
P = 2,000 - 20Q
Where P is the price and Q is the number old per month.
A. Derive the marginal revenue curve for the firm.
B. At what outputs is the demand for the fim's product price elastic?
C. If the firm wants to maximize its dollar sales volume, what price should it charge?
Explanation / Answer
Equilibrium Price
QD = QS
340 - 6P = 100 + 2P
8P = 240
P = 30
Quantity = 100 + 2P = 100 + 2*30 = 160
7)
Total Revenue = PQ = ( 2000 - 20Q) * Q = 2000 Q - 20 Q^2
First derivative = Marginal Revenue curve = 2000 - 40 Q
First derivative >= 0 implies
2000 - 40 Q >= 0
Q >= 50 ( for elastic product price )
If the firm wants to maximize the dollar sales volume , it should charge P = 2000 - 20Q = 2000 - 20 * 50 = $1000
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.