Calculating the revenue maximizing price
Not what you're looking for?
If the demand for the Chicago Expressway is: P = 800 - 0.16Q
If P = $2, What is the Quantity Demanded?
At what price quantity point does this demand curve have a price elasticity of -1?
If the goal of the transit authority was to maximize total revenues, what is the new price it should set? Also, what would the total revenue raised in this new price scheme?
Purchase this Solution
Solution Summary
This solution determines the revenue maximization price in the given case.
Solution Preview
If P = $2, What is the Quantity Demanded?
P = 800 - 0.16Q
Put P=$2
2=800-0.16Q
-798=-0.16Q
Q=4987.5
At what price quantity point does this demand curve have a price elasticity of -1?
P = 800 - 0.16Q
On rearranging we ...
Education
- BEng (Hons) , Birla Institute of Technology and Science, India
- MSc (Hons) , Birla Institute of Technology and Science, India
Recent Feedback
- "Thank you"
- "Really great step by step solution"
- "I had tried another service before Brain Mass and they pale in comparison. This was perfect."
- "Thanks Again! This is totally a great service!"
- "Thank you so much for your help!"
Purchase this Solution
Free BrainMass Quizzes
Pricing Strategies
Discussion about various pricing techniques of profit-seeking firms.
Basics of Economics
Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.
Economic Issues and Concepts
This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.
Elementary Microeconomics
This quiz reviews the basic concept of supply and demand analysis.
Economics, Basic Concepts, Demand-Supply-Equilibrium
The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.