The Solis Company has estimated the demand curve for its product is represented by the equation:

a. Based on the estimated demand curve, write the equations for Solis' total revenue, average revenue, and marginal revenue.
b. What is the maximun total revenue per year that Solis can obtain from sales of its product? Give the exact dollar amount and show how you determined it.
c. Calculate the point price elasticity of demand for Solis' product when Q = 50,000. Is demand elastic or inelastic at that quantity? How do you know?
d. Calculate the arc price elasticity of demand for Solis' product between Q = 30,00 and Q = 32,000. Interpret your results and related it to what will happen to total revenue is Solis is initialy at Q = 30,000 and decides to cut price to increase it sales from 30,000 to 32,000 units.

Question

The Solis Company has estimated the demand curve for its product is represented by the equation:
  
a. Based on the estimated demand curve, write the equations for Solis' total revenue, average revenue, and marginal revenue.
b. What is the maximun total revenue per year that Solis can obtain from sales of its product? Give the exact dollar amount and show how you determined it.
c. Calculate the point price elasticity of demand for Solis' product when Q = 50,000. Is demand elastic or inelastic at that quantity? How do you know?
d. Calculate the arc price elasticity of demand for Solis' product between Q = 30,00 and Q = 32,000. Interpret your results and related it to what will happen to total revenue is Solis is initialy at Q = 30,000 and decides to cut price to increase it sales from 30,000 to 32,000 units.

Quizplus · Accepted Answer

The Answer of The Solis Company has estimated the demand curve for its product is represented by the equation:
  
a. Based on the estimated demand curve, write the equations for Solis' total revenue, average revenue, and marginal revenue.
b. What is the maximun total revenue per year that Solis can obtain from sales of its product? Give the exact dollar amount and show how you determined it.
c. Calculate the point price elasticity of demand for Solis' product when Q = 50,000. Is demand elastic or inelastic at that quantity? How do you know?
d. Calculate the arc price elasticity of demand for Solis' product between Q = 30,00 and Q = 32,000. Interpret your results and related it to what will happen to total revenue is Solis is initialy at Q = 30,000 and decides to cut price to increase it sales from 30,000 to 32,000 units.

The Solis Company Has Estimated the Demand Curve for Its