QUESTION 15

# QUESTION 15 - QUESTION 13 Given the following demand...

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QUESTION 13 Given the following demand function: a. Compute the associated arc elasticity, total revenue, and marginal revenue values. price Quantity Arc Elasticity Total Revenue Marginal Revenue P (\$) Qd (pounds of steak) Ed (\$) (\$/unit) 12 30 n.a 360 n.a 11 40 -3.2857 440 8 10 50 -2.3333 500 6 9 60 -1.7273 540 4 8 70 -1.3077 560 2 7 80 -1 560 0 6 90 -0.7647 540 -2 5 100 -0.5789 500 -4 4 110 -0.4286 440 -6 b. On separate graphs, plot the demand function, total revenue function, and marginal revenue function. I. Demand function II. Total revenue function III. Marginal revenue function

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QUESTION 14 Study Income Elasticit y Price Elasticit y Q1 (million ) Q1 [Ed(%∆P)] Q1 [Ey(%∆P )] Q2 (million) Chow 3 -1.2 11 -0.792 1.32 11.528 Alkinson 2.5 -1.4 11 -0.924 1.1 11.176 Roos and Von Szeliski 2.5 -1.5 11 -0.99 1.1 11.11 Suits 3.9 -1.2 11 -0.792 1.716 11.924 Example calculation for Chow: Q1 [Ed(%∆P)] = 11 million x (6%x-1.2) = -0.792 milliom Q1 [Ey(%∆P)] = 11 million x (4%x3) = 1.32 million Q2 (million) = 11 million +(-0.792)+1.32 million
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## This note was uploaded on 04/27/2010 for the course GSM 5660 taught by Professor Ahmad during the Fall '10 term at Zhejiang University.

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QUESTION 15 - QUESTION 13 Given the following demand...

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