User Account

All Pages

Derive the marginal revenue curve for the firm

Assignment Help Microeconomics
Reference no: EM132339707

Question: 1. Suppose equilibrium price in the market is $30, and the marginal revenue is $20. What is the price elasticity of demand?

2. The David Company's demand curve for the company's product is P = 2,000 - 20Q, where P = price and Q = the number sold per month.

a. Derive the marginal revenue curve for the firm.

b. At what output is the demand for the firm's product price elastic?

c. If the firm wants to maximize its dollar sales volume, what price should it charge?

3. Rebel Sole is a rapidly expanding shoe company. The following is the demand estimate for its popular shoes. The estimate was done using 40 observations.

Q = 10 - 10 P + 4 A + 0.42I + 0.25Py

(3) (1.8) (0.7) (0.1) (0.1)

F = 93, s = 6, R2 = 93%

Q is quantity sold (in thousands), P is shoe price, A is advertising expenditure (in thousands), the numbers in parentheses are standard errors, I is disposable income per capita (thousands of dollars), and Py is the price of related goods.

a. Evaluate the model based on F, R2.

b. Test the significance of Py.

c. If P = $5, A = $30,000, I = 50,000, and Py = $6, calculate advertising elasticity.

d. Given the information in c. above, calculate the 95% confidence interval for Q.

Reference no: EM132339707

Questions Cloud

Besides risk maps and value maps : Besides risk maps and value maps, what other tools and techniques are available to manage risk and make risk-informed decisions?
Explain the economic affects of large localized events : Economic Shock Assignment - For this assignment, research the economic affects of natural disasters. You can research the economic affects of large localized.
Summarize your findings on this issue : In a minimum of 500 words, summarize your findings on this issue. Make sure to focus on how the popular press information agrees (or disagrees).
Why have economic analyses of clinical innovations important : Everybody describe some healthcare situations in which an agent has taken advantage of a principal. Why have economic analyses of clinical and administrative.
Derive the marginal revenue curve for the firm : Derive the marginal revenue curve for the firm. If the firm wants to maximize its dollar sales volume, what price should it charge?
What are some strategies for reducing adverse selection : What are some strategies for reducing adverse selection in insurance markets? What sorts of problems do these solutions cause?
Discussion about the common applications : The essay or personal statement is a tool that allows for a wholistic review of the applicant by the Admissions Committee. Candidates for admissions may choose.
Describe main sources of project scope and schedule risks : Name and briefly describe 5 different identification tools. Briefly describe the main sources of project scope and schedule risks.
Write your response on nonprofit organizations : Nonprofit organizations have an influential impact within communities around the nation. Since non-profits tend to have a specialty they tend to be very well.

Reviews

Write a Review

Microeconomics Questions & Answers

  Determining the ddb switching to sl method

A business equipment used for the manufacture of commercial goods can be purchased for $30,000. This asset is expected to be sold after 4 years for $6,000.

  Label the substitution and income effects

Label the substitution and income effects.

  What are the requirement for each subsystem proposed for pdq

What are the requirements for each subsystem proposed for PDQ? Pick one of these subsystems and build as complete a WBS as you can. You may have to make assumptions in order to complete this exercise. If so, state them clearly.

  Impact of incentives on production plans

Suppose you manage a United States based firm that makes shoe laces that you sell in a highly competitive market your shoe laces are considered a standardized commodity through your consumers

  Can we conclude that the market demand for x slopes upward

Following are observations on the market price and the quantity of good X produced and consumed in three different years: $10 and 100 units, $4 and 57 units.

  What is the store arc elasticity of demand for charcoal

The Future Flight Corporation manufactures a variety of Frisbees selling for $2.98 each. Sales have averaged 10,000 units per month during the last year. Recently Future Flight's closest competitor, Soaring Free Company, cut its prices on similar ..

  What price is demand unit elastic

Determine the price elasticity of demand at prices $5, $6, and $8 for Qd = 600 - 2P2 , At what price is demand unit elastic?

  Calculate the equation for short-run total cost

Assume that a firm operates with the production function Q(K.L)=KL1/2 and assume that the price of labor w=$4 and the rental rate for capital r=$2. without doing any calculations, sketch a representative LTC and LAC curve for this production functi..

  Classify each of the following goods as private

2. Jim is a janitor working for a cleaning company which receives $500 from each company that hires them for keeping the company's employee restrooms clean for a period of one month. Jim is paid $2 for each bathroom he cleans and pays for his own sup..

  History of income or losses from the activity

Write a detailed memo to Randolph with your research findings to properly advise him on this matter -  The financial status of the taxpayer (e.g., if the taxpayer does not have sub- stantial amounts of other income, this may indicate that the activ..

  Explain the intervention and detail its history

Describe the intervention and detail its history. Analyze the arguments for government intervention as opposed to arguments for market-based solutions. Examine who may be helped and who may be hurt by the selected government intervention.

  Which is better- inflation or deflation

hat is "human capital", why is it economically important and how is it created? Which is better: inflation or deflation

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd