Question #53517

It is known that quantity demanded decreases by two units for each $1 increase in price. At a price of $5, quantity demanded is ten units.
a) What will be the quantity demanded is price is zero?
b) Write and equation for quantity demanded as a function of price.
c) Write an equation that expresses price as a function of quantity.
d) Write an equation for total revenue.

Expert's answer

It is known that quantity demanded decreases by two units for each $1 increase in price. At a price of $5, quantity demanded is ten units.

a) If the price is zero the quantity demanded will be zero too.

b) The equation for quantity demanded as a function of price is Q = 20 - 2P.

c) An equation that expresses price as a function of quantity will be P = 10 - 0.5Q.

d) An equation for total revenue is:

TR = P*Q = (10 - 0.5Q)*Q = 10Q - 0.5Q^2.

a) If the price is zero the quantity demanded will be zero too.

b) The equation for quantity demanded as a function of price is Q = 20 - 2P.

c) An equation that expresses price as a function of quantity will be P = 10 - 0.5Q.

d) An equation for total revenue is:

TR = P*Q = (10 - 0.5Q)*Q = 10Q - 0.5Q^2.

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