This is urgent please help! 3. Suppose the demand for baseballs is given by Q =

Question

This is urgent please help!

3. Suppose the demand for baseballs is given by Q = 200 - 8P.

a. waht is the price elasticity of demand when P=6?

b. at what price will total revenue be maximized?

c. what is the firm's marginal revenue when the price is $10?

4. Suppose there are n identical firms in a market. each firm's cost function is given by C= 240+14q^2, where q is the amount that an individual firm produces. this means that an individual firm's marginal cost is given by MC = 30q. Also, the market demand is given by P = 504 - 8Q, where Q is the total amount of the good produced by all of the firms combined. therefore, Q= n*q.

a. how much output will each of them produce?

b. what will be the market price?

c. how many firms will there be in long run equilibrium?

Explanation / Answer

3 a) ?Q/?P = -8

If P=6, then Q=152, Ep= (-8)*(6/152) = -0.32

b) Total Revenue = Q*P= 200P-8P^2

Revenue is maximized when MR=0, 200-16P=0, P=12.5

c) MR = 200 - 16*10 = 40

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