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302HW1 - 1(20 total points Suppose the demand for a product...

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25 1. (20 total points) Suppose the demand for a product is given by QD = 2000 - 25P. a) (10 points) Calculate the Price Elasticity of Demand when the price is $30 . .16p = 20QV - 0,> p-:;:t?JO Qp ~ JOIn> - 25(30) ,)..: go - ~ .--1:- (~(J '\ Q!) = /250 SlOpe c-. - ~S 7:: =- - Yz'5 ~?o) 7:: -::. -l~(%S1» 1.1 ::.. - o. b 1 (ntl ClSt. (- b) (5 points) What price should the firm charge if it wants to maximize its revenue? r '-=' -- ,<"~,.,,., j . I -~ --2) ( ]OO(J" ~.·Jf I ~ I ~ - 2 Sf 2 m }.) -7. ::,p --)0()l~~2c.:)F': ".?5P 50f -=- __ ~.'=.:)·o If-=~~oJ c) (5 points) Over what price range is demand elastic? '. . , ~ ~f\,\o..Ac\ I:' eJ..QSt,~ W~· PYl\.] I ~ 6-./f.., ,+0 .~ , ''''' X" '/,0 ~~~'./\ '\ '1/' ., . / / v \ ~ (.l ,.;"- ,. \ " \" . .~ ... \,(~/ \"t-\L I..t' --\ oL.. ~t> '-------~----.- o /Obl) 2000 (~
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2. (15 points) Suppose the demand for guitars in State College is given by Qd 9000 - 12P where Qd is the quantity demanded, and P is the price of guitars. Also, suppose the supply of guitars is given by Qs = 9P - 3852, where Qs is the quantity supplied of guitars. a) (5 points) Calculate the equilibrium price of guitars and the equilibrium quantity of guitars in State College. Show your work. 9(fm) -/2 p:. q p ~"~~5 2 - Q:: 9(10D -12(6(2) /2\?5P; 21[ I rQ~::-_~,~ 55:1 1_ =-6(L. b) (5 points) Suppose the actual price
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