Answer to Question #225008 in Economics for Wealthdotun

Question

Given that; P= 144-12Q

i) Determine the equation for the Total revenue and Marginal revenue

ii) At what output is Marginal Revenue = 0

iii) At what output is Total revenue at maximum

iv) Determine the price elasticity of demand at output where Total Revenue is maximum

Answer 1

$$TR=pQ=144Q-12Q^2$$

$$MR=144-24Q$$

$$144-24Q=0$$

$$Q=6$$

$$p=144-12\times6=72$$

$$E=-12\times \frac{72}{6}=-144$$