Given the demand function Q_X = 1500 - 100P_X + 75P_Y + 1.5I + .06A where P_Y = $40.00. I = $2500, and A = $5,000, what is the total revenue equation?

Question

Quizplus · Accepted Answer

The total revenue (TR) equation is derived by first finding the quantity demanded (QD) using the given demand function and then multiplying QD by the price (P). The demand function provided is Q_X = 1500 - 100P_X + 75*40 + 1.5*2500 + .06*5000. Simplifying this gives a relationship between QD and P. TR = P*QD, where P is the price of the product. The correct answer involves both the quantity and the price, which after simplification, should resemble the structure in option E, indicating a direct relationship between TR and both Q and P, with specific coefficients.

Given the Demand Function QX = 1500 - 100PX

Given the Demand Function Q_X = 1500 - 100P_X