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A Steel Supply and Demand for the USA are given by Demand: P = 1200 - 100 (QD) and supply: P = 100 (QS) where QD = quantity demanded and QS = quantity supplied. Assume the selling price is $700 and the firm decreases the price of the product. Will the total revenue falls or increases. Why? Illustrate graphically the relationship between elasticity, price and total revenue by identifying the revenue maximization price and revenue maximization output?

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Nusrat Fatima
Nusrat FatimaLv10
28 Sep 2019

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Related questions

A Steel Supply and Demand for the USA are given by Demand: P = 1200 - 100 (QD) and supply: P = 100 (QS) where QD = quantity demanded and QS = quantity supplied

Compute the price elasticity of demand when the price is $800.

What can you say about the demand?

Compute the price elasticity of demand between $200 and $900.

Is the demand elastic or inelastic?

Assume that demand for a commodity is represented by the equation P=18-2Qd and supply is represented by the equation P=-2+2Qs.

Where Qd and Qs are quantity demanded and quantity supplied, respectively, and P is the price.

Instructions: Round your answer for the price to 2 decimal places and enter your quantity as a whole number.

A. Using the equilibrium condition Qs = Qd, determine the equilibrium price.

B. Now determine equilibrium quantity.

A. consider a demand curve of the form
Qd=-2p+20

where Qd is the quantity demanded of a good and P is the price ofthe good. 
Qs=2p-4

where Qs is the quantity supplied. Be sure to put P on the verticalaxsis. Assume that all the Qs and Ps are nonnegative for parts a,b, and c. At what vaules of P and Q do these curve intersect thatis, where does Qd=As

B. Now suppose at each price that individuals demand four moreunits of output--that the demand curve shift to Qd=-2p+24
Graph this new demand curve. At what values of P and Q does the newdemand curve intersect the old supply curve--that is, where does Qd=Qs

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