Answered step by step
Verified Expert Solution
Question
1 Approved Answer
note: important how to graph the slop of TR This problem gives you a preview of something you might see in a microeconomics class. Suppose
note: important how to graph the slop of TR
This problem gives you a preview of something you might see in a microeconomics class. Suppose there's an appliance store that sells air conditioners. It could set its price high and sell very few air conditioners, or it could set its price low and sell many more air conditioners. The following table shows some possible choices this store could make: Total Revenue (P x Q) Price Quantity (Air conditioners per year) (Dollars per year) (Dollars per air conditioner) 720 0 54,000 540 100 360 200 72,000 D 180 300 54,000 0 400 0 The graph below plots the firm's total revenue curve: that is, the relationship between quantity and total revenue given by the two right columns in the table above. The five choices are also labeled. Finally, two black lines are shown; these lines are tangent to the green curve at points B and D. ? 90 81 A 72 63 AD 54 45 36 27 18 + 0 200 0 50 100 150 250 300 350 400 QUANTITY (Air conditioners per year) TOTAL REVENUE (Thousands of dollars per year) Using the information on the slope of the lines tangent to the curve at points B and D, plot the slope of the total revenue curve on the graph below. (As it turns out, it's a straight line, so the two points you plot will determine a line.) 450 360 Slope of TR 270 180 06 +> -90 -180 -270 -360 -450 250 400 100 150 200 300 350 QUANTITY (Air conditioners per year) REVENUE (Dollars per air conditioner) 90 50 The total revenue curve reaches its maximum at a quantity of air conditioners per year. At this point, the slope of the total revenue curve isStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started