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Unformatted text preview: Answer: E P D = P P MAX-P = (20) / (100-20) =-1 / 4 c) Suppose that the farmers decide to withhold some of their produced milk in an eort to raise the price in the market. Find the amount of quantity they will need to withhold such that their total revenues are maximized. 1 Answer: Total revenue will be maximized at a point where E P D = 1 . This will occur at a point where P = 50 and Q = 25 . Therefore, the farmers will have to withhold 15 gallons of milk. 2...
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This note was uploaded on 04/04/2012 for the course ECON 010 taught by Professor Stein during the Fall '07 term at UPenn.
- Fall '07