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In: Economics

The market demand for hamburger is given by the equationQd=6-0.5P .

The market demand for hamburger is given by the equationQd=6-0.5P .

  1. Derive the market demand schedule and the toral revenue if the price per hamburger takes the following values: $12, $10, $6, $6, $4, $2, $0. Marks 4

  1. Using this information about demand and the total revenue, draw the demand and TR revenue curves. Marks 4

  1. Use the point elasticity formula, compute the price elasticity of demand at each hamburger price and show the relationship between the price elasticity of demand and the total revenue for each price on the demand curve you have drawn. Marks 6

Solutions

Expert Solution

Price($) Qd = 6-0.5P TR = P*Q Price elasticity of demand (ed)
12 0 0
10 1 10 -11.00 elastic
8 2 16 -3.00 elastic
6 3 18 -1.40 elastic
4 4 16 -0.71 inelastic
2 5 10 -0.33 inelastic
0 6 0 -0.09 inelastic

Rahul Sunny answered 2 years ago
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