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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