# 4973-03-econ

1.1

2Demand

A manufacturer faces a downward-sloping demand curve for her product:

Q = 300 - 2P (demand)

(a)What is the equation for the inverse demand curve? ()

(b)What is the choke price? ()

(c)What is the equation for the marginal revenue curve? ()

(d)At what price and quantity are total revenues maximized? ()

(e)At what prices is the demand curve elastic? ()

(f) What is the rate of change of Q with respect to P, _Q

_P ? ()

(f)At P = 50, what is Q? ()

(h) At P = 50, what is the price elasticity of demand? ()

_

3Supply and Demand ()

The supply curve is:

Q = 10 + 3P (supply)

The inverse demand curve is:

P = 20 -Q/2 (inverse demand)

(a)What is the choke price?

(b)What is the equation for the demand curve?

(c) What is the rate of change of Q with respect to P, _Q

_P for the demand curve?

(c)What is the equilibrium price?

(d)What is the equilibrium quantity?

(f) What is the price elasticity of demand at the equilibrium price and quantity?

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