Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

This problem gives you a preview of something you might see in a microeconomics class. Suppose there's an appliance store that sells refrigerators. It could

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed
This problem gives you a preview of something you might see in a microeconomics class. Suppose there's an appliance store that sells refrigerators. It could set its price high and sell very few refrigerators, or it could set its price low and sell many more refrigerators. The following table shows some possible choices this store could make: Price Quantity Total Revenue (P x Q) (Dollars per refrigerator) (Refrigerators per year) (Dollars per year) A 400 O 0 B 300 140 42,000 C 200 280 56,000 D 100 420 42,000 E 0 560 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 ve choices are also labeled. Finally, two black lines are shown; these lines are tangent to the green curve at points B and D. (D 70 63 C 56 4 49 42 B D 35 TOTAL REVENUE (Thousands of dollars per year) 28 21 14 7 A E 0 0 70 140 210 280 350 420 490 560 QUANTITY (Refrigerators 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.) 250 O 200 Slope of TR 150 100 50 0 REVENUE (Dollars per refrigerator) -50 -100 -150 -200 -250 70 140 210 280 350 420 490 560 QUANTITY (Refrigerators per year)Slope of TR 150 100 50 0 REVENUE (Dollars per refrigerator) -50 -100 -150 -200 -250 70 140 210 280 350 420 490 560 QUANTITY (Refrigerators per year) The total revenue curve reaches its maximum at a quantity of refrigerators per year. At this point, the slope of the total revenue curve isSlope of TR 150 100 50 0 REVENUE (Dollars per refrigerator) -50 -100 -150 -200 140 -250 70 140 210 280 350 420 490 5 420 QUANTITY (Refrigerators per year) 280 560 The total revenue curve reaches its maximum at a quantity of refrigerators per year. At this point, the slope of the total revenue curve isRefresh Your Math & Graphing Skills 150 Slope of TR 100 50 -100 REVENUE (Dollars per refrigerator) -150 negative atitsminimum 140 210 230 350 420 490 560 positive QUANTITY (Refrigerators per year) at its maximum equal to zero urve reaches its maximum at a quantity of v refrigerators per year. At this point, the slope of the total revenue curve is V X

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Society, Economy, Religion And Festivals Of Tiwas In Assam

Authors: Bandana Baruah

1st Edition

9351288633, 9789351288633

More Books

Students also viewed these Economics questions