b In this case if you want to increase total revenue you should decrease your

# B in this case if you want to increase total revenue

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b. In this case, if you want to increase total revenue, you should decrease your price. c. This result is a move downward along the demand curve.
** If income increases, which good from the list below is likely to experience the largest decrease in the quantity demanded? D. old canned meat ** A firm will never operate below the midpoint of a linear demand curve, where demand is inelastic ** Revenue from Mobile Phones. Consider the demand for mobile phones. Suppose the price elasticity of demand for the market as a whole is 0.7 . a. If all mobile phone companies simultaneously increase their prices, total revenue will increase . b. If a single mobile phone company increases its prices, we can expect the company's total revenue to decrease ** To compute the price elasticity of demand, we divide the percentage change in quantity demanded by the percentage change in price and then take the absolute value of the ratio. ** Import Restrictions and the Price of Steel. Suppose import restrictions on steel decrease the supply of steel by 24 percent. The initial price of steel is \$100 per unit, the elasticity of demand is 0.70, and the elasticity of supply is 2.3. The equilibrium price of steel will increase by 8 percent (enter your response as an integer) . Use the line drawing tool to approximate and label the new supply curve. Be sure the new supply curve illustrates the new equilibrium price correctly.
The Average Cost of Drama DVDs. You have been hired to produce a DVD of a play put on by a high- school drama club. It will take you about 50 hours to make the master that is stored on a hard drive on your computer. The opportunity cost of your time is \$20 per hour. The marginal cost of burning DVDs is constant at \$2. ( Enter each of the following as an integer value .) The total cost and average cost of the first DVD is \$ 1,002 . The average cost of the 50 th DVD is \$ 22 . The average cost of the 100 th DVD is \$ 12 . Use the 3-point curved line drawing tool to draw the average-cost curve for producing the DVD, with quantities up to 100 DVDs. (Your coordinates do not need to be precise.). Properly label this curve. Carefully follow the instructions above, and only draw the required objects.

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• Summer '11
• Creamer
• Economics

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