I am having a tough time with this homework question. Please try to show work if possible! Thank you!
Garden of Edam sells fondue kits over the internet. The demand function for this product is Q = 20 - (1/3)P, where Q is the number of kits sold per week and P is the price per kit.
1. Solve for the inverse demand function. __I think it would be P=-60-(1/3)Q but correct me if I'm wrong please! Thanks!__________
2. What is the slope of this relationship in the standard P/Q diagram? ______________
3. Compute the point price elasticity of demand (PED) when
Q = 20 ________________ Q = 6 _________________
4. Compute the point PED when P = 30 __________ and P = 60 _____________.
5. Give a one sentence quantitative interpretation of the Q = 6 elasticity.
_____________________________________________________________________
_____________________________________________________________________
6. Give a one sentence qualitative interpretation of the Q = 6 elasticity.
_____________________________________________________________________
_____________________________________________________________________
7. Write the equation showing kit total
revenue (TR) as a function of Q. ___________________________________
8. Write the equation showing marginal revenue
(MR) as a function of Q. ___________________________
I am having a tough time with this homework question. Please try to show work if possible! Thank you!
Garden of Edam sells fondue kits over the internet. The demand function for this product is Q = 20 - (1/3)P, where Q is the number of kits sold per week and P is the price per kit.
1. Solve for the inverse demand function. __I think it would be P=-60-(1/3)Q but correct me if I'm wrong please! Thanks!__________
2. What is the slope of this relationship in the standard P/Q diagram? ______________
3. Compute the point price elasticity of demand (PED) when
Q = 20 ________________ Q = 6 _________________
4. Compute the point PED when P = 30 __________ and P = 60 _____________.
5. Give a one sentence quantitative interpretation of the Q = 6 elasticity.
_____________________________________________________________________
_____________________________________________________________________
6. Give a one sentence qualitative interpretation of the Q = 6 elasticity.
_____________________________________________________________________
_____________________________________________________________________
7. Write the equation showing kit total
revenue (TR) as a function of Q. ___________________________________
8. Write the equation showing marginal revenue
(MR) as a function of Q. ___________________________
Related textbook solutions
Related questions
1. You are given costs for a firm in the following table.
| Quantity | Total Cost | Variable Cost | Fixed Cost | Marginal Cost |
| 10 | 35.7 | ? | $10 | ? |
| 11 | ? | 47.8 | ? | ? |
| 12 | ? | ? | ? | 32 |
From the information given, calculate the Average Variable Cost when the firm produces 12 units. Round your answer to one decimal.
2.
Demand is given by:
Q = 2000 - 223P + 8P' + 180Y, and P = 8, P' = 9, and Y = 4
Calculate the Income Elasticity of Demand at Y = 4? Round your answer to two decimal places.
3.
Suppose the cost function is C(Q) = 49 + 5Q + 6Q2 + 8Q3. What is the average fixed cost of producing 79 units?
Please round answer to one decimal place.
4.
A firm faces the following demand:
Q = 109 - 0.21P
The firm's cost function is:
C = 5Q2 + 99Q + 1,896
How much profit does this firm earn when it produces the quantity, Q, that maximizes profit?
