Question #323153

1) When the demand function is 2Q - 24 + 3P = 0, calculate the price elasticity of demand when P = 4 and find the marginal revenue when Q=3.


2) A market consists of three people, A, B , and C, whose individual demand equation are as follows:

A: P= 35 - 0.5QA

B: P= 50 - 0.25QB

C: P= 40 - 2.00QC

The industry supply equation is given by Q= 40 + 3.5P

a) Determine the equilibrium price and quantity.

b) Determine the amount that will be purchased by each individual.


1
Expert's answer
2022-04-04T09:15:11-0400

1)

2Q-24+3P=0

Q=12-1.5P

P=823QP=8-\frac{2}{3}Q

ϵ=dQdP×PQ\epsilon=\frac{dQ}{dP}×\frac{P}{Q}

Where dQdP=1.5\frac{dQ}{dP}=-1.5

ϵ=1.5×46\epsilon=-1.5×\frac{4}{6}

ϵ=1\epsilon=-1


MR=dTRdQMR=\frac{dTR}{dQ}

P=823QP=8-\frac{2}{3}Q

TR=P×QTR=P×Q

TR=8Q23Q2TR=8Q-\frac{2}{3}Q^2

MR=843QMR=8-\frac{4}{3}Q


2)

P=35-0.5QA ; QA=70-2P

P=50-0.25QB ;. QB=200-4P

P=40-2QC ; QC=20-0.5P


Qs=40+3.5P

E=Qd=QsE=Qd=Qs

Where

Qd=QA+QB+QCQd=Q_A+Q_B+Q_C

Qd=2906.5PQd=290-6.5P

2906.5P=40+3.5P\therefore 290-6.5P=40+3.5P

250=10P250=10P

P=25P^*=25

Q=2906.5(25)=127.5Q^*=290-6.5(25)=127.5


QA=702(25)Q_A=70-2(25)

QA=20Q_A=20


QB=2004(25)Q_B=200-4(25)

QB=100Q_B=100


QC=200.5(25)Q_C=20-0.5(25)

QC=7.5Q_C=7.5


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