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Create an inverse demand of P = a - bQ, inverse demand of P = 11 - 2Q.

a) Calculate the marginal revenue (MR).
b) Find the quantity and price which maximize profits when marginal cost is zero (round off to two decimal places for any number that is not a whole number).
c) What is the revenue generated by this price and quantity?
d) At that price and quantity, what is the consumer surplus (CS)?
e) Find the price elasticity of demand at that quantity.
f) If the quantity is restricted to be no greater than Q' = 3.00, what does this do to the firm's revenue? If Q represents the number of seats sold, and Q' represents the seating capacity of the stadium, would your stadium have empty seats?

Econometrics, Economics

  • Category:- Econometrics
  • Reference No.:- M9478370

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