7 Business Economics Questions

QUESTION 1

PED= ==0.375

Some of the factors that could have contributed to reduction in attendance include a decrease in income, a decrease in population or change in preferences.

The theatre should further increase the price of the tickets so as to increase revenue.

The optimal price of the theatre tickets would be the price at which the marginal revenue is equal to the marginal cost.

QUESTION 3

Profit=$25,000, Q=10,000 books

Cost=$0.50

Cost of developing e-books=$100,000

Profit=TR-TC

25000=TR-100000+(0.50*10000)

25000=TR-105000

TR=25000+105000

TR=130,000

TR=P*Q

P=TR/Q=130000/10000

P=$13

QUESTION 5

P = 20 – 4Q

MC=$4

TR=(20 – 4Q)Q

TR=20Q-4Q2

MR=20-8Q

MR=MC

20-8Q=4

Q=2

P=20 – 4*2

P=12