Answer:
1. A.
2. F.
3. G.
4. A.
Step-by-step explanation:
Given the following Demand Curve: P = 24 - 8Q
1 answer:
Answer:
Maximum value of total revenue = 18
Step-by-step explanation:
- Express this Demand Curve in terms of Q.
<em>P = 24 - 8Q (it is the same equation)</em>
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- Find P, if Q=2
<em>P= 24-8(2)</em>
<em>P=24-16</em>
<em>P=8</em>
- Find Q if P = 8.
<em>P = 24 - 8Q</em>
<em>8= 24 - 8Q</em>
<em>8Q= 24-8</em>
<em>8Q=16</em>
<em>Q=16/8</em>
<em>Q=2</em>
- Total revenue in terms of Q
<em>Total revenue is P times Q, that is</em>
<em>P*Q=TR=(24-8Q)*Q</em>
<em>TR=24Q-8Q^2</em>
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- Marginal Revenue
<em>It is the first derivative of TR</em>
<em>TR'(Q)= 24-16Q</em>
- Find the values of P and Q that will maximize total revenue.
<em>To find them first TR'(Q)=0, that is</em>
<em>0=24-16Q</em>
<em>16Q=24</em>
<em>Q=24/16</em>
<em>Q=3/2</em>
<em>Q=1.5</em>
<em>and we plug in 1.5 in P=24-8Q, which is,</em>
<em>P=24-8Q</em>
<em>P=24-8(1,5)</em>
<em>P=24-12</em>
<em>P=12</em>
- Calculate this maximum value of total revenue
<em>P=12 Q=1.5</em>
<em>P*Q=Total Revenue</em>
<em>12*1.5=Total Revenue</em>
<em>18=Total Revenue</em>
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