Intermediate Microeconomics and Its Application 12th Edition by Walter Nicholson,Christopher Snyder

Exercise 8

Suppose that the demand curve for garbanzo beans is given by
Q = 20 ? P
where Q is thousands of pounds of beans bought per week and P is the price in dollars per pound.
a. How many beans will be bought at P = 0?
b. At what price does the quantity demanded of beans become 0?
c. Calculate total expenditures (P • Q) for beans of each whole dollar price between the prices identified in part a and part b.
d. What price for beans yields the highest total expenditures?
e. Suppose the demand for beans shifted to Q = 40 ? 2P. How would your answers to part a through part d change? Explain the differences intuitively and with a graph.