Given the demand function Q_X = 5,000 - 250P_X +120P_Y +.04I where P_Y= $50.00 and I = $60,000, the total revenue equation is:
TR = 53.6Q_X-.004Q_X.

Question

Given the demand function Q_X = 5,000 - 250P_X +120P_Y +.04I where P_Y= $50.00 and I = $60,000, the total revenue equation is: TR = 53.6Q_X-.004Q_X.

Quizplus · Accepted Answer

The total revenue (TR) equation is derived from the price (P) times the quantity sold (Q), not directly from the demand function parameters and other variables like the price of a substitute good (P_Y) or income (I). The given demand function does not directly translate to the provided total revenue equation without further information on how price (P) relates to quantity (Q) in this context.

Given the Demand Function QX = 5,000 - 250PX +120PY

Given the Demand Function Q_X = 5,000 - 250P_X +120P_Y