Question
At what price level(s) will this firm maximize Total Revenue? Explain your answer. (3 Marks) Price per Energy Bar Quantity Demanded (1,000s) E d Total
- At what price level(s) will this firm maximize Total Revenue? Explain your answer. (3 Marks)
Price per Energy Bar | Quantity Demanded (1,000s) | Ed | Total Revenue | Elasticity |
| $1.20 | 7.5 | 0.243 | 9,000 | Inelastic |
| $2.20 | 6.5 | 0.450 | 14,300 | Inelastic |
| $3.20 | 5.5 | 0.740 | 17,600 | Inelastic |
| $4.20 | 4.5 | 1.175 | 18,900 | Elastic |
| $5.20 | 3.5 | 1.900 | 18,200 | Elastic |
| $6.20 | 2.5 | 3.350 | 15,500 | Elastic |
$7.20 | 1.5 | 3.350 | 10,800 | Elastic |
Step by Step Solution
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Step: 1
To maximize total revenue a firm should set the price at the point where the elasticity of demand is ...
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Microeconomics Theory and Applications
Authors: Edgar K. Browning, Mark A. Zupan
12th edition
9781118920060, 1118758870, 1118920066, 978-1118758878
