Ex7306

Ex7306 - Please make your selection. 1. Choice One 2....

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Please make your selection. .. 1. Choice One 2. Choice Two 3. Choice Three
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Willingness to pay for an IPOD $ 6 0 o r m e 5 ) 4 3 2 1 l s 6% 4% 2% 5% 10% 16% 16% 12% 20% 9%
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Which price maximizes revenue? 3 0 2 5 1 50% 50% 0% 0% 0% 0% 1. $450 2. $350 3. $300 4. $250 5. $200 6. $150
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Total Revenue Maximization Buyer Pct of Quantity Value class Price Demanded Revenue 700 6 700 6 4200 500 4 500 10 5000 450 2 450 12 5400 400 5 400 17 6800 350 9 350 26 9100 300 20 300 46 13800 250 12 250 58 14500 200 16 200 74 14800 150 16 150 90 13500 50 10 50 100 5000
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Price and Revenue 0 2000 4000 6000 8000 10000 12000 14000 16000 0 100 200 300 400 500 600 700 800 Price Revenue
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Demand Curve for Ipods $0 $100 $200 $300 $400 $500 $600 $700 $800 0 20 40 60 80 100
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Elasticity along demand curve Price Quantity Elasticity=(P/Q)(DQ/DP) 700 6 -2.3 500 10 -2.0 450 12 -3.8 400 17 -4.2 350 26 -5.4 300 46 -1.6 250 58 -1.4 200 74 -0.9 150 90 -0.2 50 100
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Elasticity of Demand vs Price -6.0 -5.0 -4.0 -3.0 -2.0 -1.0 0.0 $0 $200 $400 $600 $800 Price Elasticity of Demand
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Total Revenue and quantity $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 0 20 40 60 80 100
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If Marginal cost is $50, which price maximizes profits? 3 5 0 2 1 0% 33% 0% 33% 33% 1. $350 2. $300 3. $250 4. $200 5. $150
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Profit with $50 Marginal Cost per unit B Quantity Var. VPrice DemandeRevenue Cost Profit 700 6 4200 300 3900 500 10 5000 500 4500 450 12 5400 600 4800 400 17 6800 850 5950 350 26 9100 1300 7800 300 46 13800 2300 11500 250 58 14500
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Ex7306 - Please make your selection. 1. Choice One 2....

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