Solution to homework 2

# Solution to homework 2 - Econ 200 Autumn 2007 Ohio State...

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Econ 200 Autumn 2007 Ohio State University Homework Two Suggested Solution Problem 1 : chapter 4, pp101 # 4 a. Total revenue increases. When the price of a chip is \$400, 30 million chips are sold and total revenue equals \$12,000 million. When the price of a chip falls to \$350, 35 million chips are sold and total revenue is \$12,250 million. Total revenue increases when the price falls. b. Total revenue decreases. When the price is \$350 a chip, 35 million chips are sold and total revenue is \$12,250 million. When the price of a chip is \$300, 40 million chips are sold and total revenue decreases to \$12,000 million. Total revenue decreases as the price falls. c. Total revenue is maximized at \$350 a chip. When the price of a chip is \$300, 40 million chips are sold and total revenue equals \$12,000 million. When the price is \$350 a chip, 35 million chips are sold and total revenue equals \$12,250 million. Total revenue increases as the price rises from \$300 to \$350 a chip. When the price is \$400 a chip, 30 million

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## This test prep was uploaded on 04/19/2008 for the course ECON 200 taught by Professor Newton during the Spring '08 term at Ohio State.

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Solution to homework 2 - Econ 200 Autumn 2007 Ohio State...

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