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Unformatted text preview: along a linear demand curve. 4. Total revenue can be calculated using the formula R = pq. Assume that in a particular market with a linear demand curve, a change in price is given as p + p and the associated change in quantity is given as q + q. a) Write down a formula for the new level of total revenue, R new b) Write down a formula for calculating the change in total revenue as a result of the change in price c) Write down a formula for calculating the rate of change in revenue per change in price. d) Explain how you can use this formula to demonstrate how total revenue changes as price changes along a linear demand curve...
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This note was uploaded on 02/08/2012 for the course ECO 51844 taught by Professor Sabet during the Spring '11 term at FIU.
- Spring '11