Reference no: EM131083071

Use the demand schedule that follows to answer questions 1, 2, and 3.

1. Calculate total revenue and marginal revenue at each quantity. 

2. Use Chapter 4's total-revenue test for price elasticity to determine at which price levels the demand is elastic and inelastic. 

3. Suppose the marginal cost of successive units of output were $3.50.  What output would the profit-seeking firm produce and what price would the firm charge? 

Price	Quantity Demanded	Total Revenue	Marginal Revenue	Elasticity
$8.00	0
$7.50	1
$7.00	2
$6.50	3
$6.00	4
$5.50	5
$5.00	6
$4.50	7
$4.00	8
$3.50	9
$3.00	10

A book publisher initially prices both hardback books and paperback books at $20 per book. The hardback version comes out first, followed two months later by the paperback version. The publisher initially sells the same number of hardbacks and softbacks (100 each). A hardback book costs $3.00 to produce, and a paperback book costs $2.00 to produce.