Slope and the max height of a curve.docx - 8 Slope and the...

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8. Slope and the maximum height of a curve This problem gives you a preview of something you might see in a microeconomics class. Suppose there’s an appliance store that sells air conditioners. It could set its price high and sell very few air conditioners, or it could set its price low and sell many more air conditioners. The following table showssome possible choices this store could make:PriceQuantityTotal Revenue (P x Q)(Dollars per airconditioner)(Air conditioners peryear)(Dollars per year)A40000B30010030,000C20020040,000D10030030,000E04000The graph below plots the firm’s total revenue curve: that is, the relationship between quantity and total revenue given by the two right columns in the table above. The five choices are also labeled. Finally, two black lines are shown; these lines are tangent to the green curve at points B and D.Using the information on the slope of the lines tangent to the curve at points B and D, plot the slope ofthe total revenue curve on the graph below. (As it turns out, it’s a straight line, so the two points you

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