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Unformatted text preview: Q 0 10 20 30 40 50 60 70 80 90 100 P 5 2.5 0 e TR=PQ 0 125 0 b. Graph the total revenue schedule in increments of 10 units. Find the quantity that maximizes total revenue? What is the price elasticity at this quantity? 2. Suppose we have the following demand schedule: Q = 36/P. a. Graph this demand schedule. b. The ratio Δ Q/ Δ P equals -36/P 2 . Calculate the demand price elasticity for Q = 1, 2, 3, 4, 6, 8, 12, 18, 36? Do you notice anything peculiar about the elasticities at these points? c. Graph the total revenue schedule. Why does it have this shape?...
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This note was uploaded on 09/08/2010 for the course ECON 1B at San Jose State University .