Use the following data to answer the questions below. P Q $4.80 1170 $4.53 1235 $3.98 1337 $3.72 1442 $3.

1548

Question 5

Question text

Using OLS, the estimated inverse demand function (P=f(Q))

(P=f(Q)) is

Select one:

a. P=8.85−0.004Q

b. Q=16.73−9.02P

c. P=0.530+0.0004Q

d. Q=2509.48−283.4P

Question 6Question text

Using algebra to transform the indirect demand function, the direct demand function (Q=f(P))

(Q=f(P)) is

Select one:

a. P=1170−4.80Q

b. Q=2509.5−283.4P

c. Q=16.73−9.02P

d. Q=8.855−0.004P

Question 7Question text

Using calculus to determine dQ

dP

dQdP, construct a column which calculates the point-price elasticity for each (P,Q) combination. What is the point price elasticity of demand when P=$3.98?

Select one:

a. 0.278

b. -0.581

c. -0.844

d. 1337

Question 8Question text

What is the point price elasticity of demand when P=$3.81?

Select one:

a. 5447

b. -1.235

c. 1430

d. -0.755

Question 9Question text

To maximize total revenue, what would you recommend if the company was currently charging P=$4.53? If it was charging P=$3.81?

Select one:

a. Price should be raised above both $3.81 and $4.53.

b. Price should be lower than both $4.53 and $3.81.

c. Raise the price if it is currently $4.53; lower the price if it is currently $3.81.

d. Lower the price if it is currently $4.53; raise the price if it is currently $3.81.

Question 10Question text

Use your indirect demand function to determine an equation for TR and MR as functions of Q

What is total revenue when P=$4.80 and when P=$3.81?

Select one:

a. At P=$4.80, TR=$5,530; at P=$3.81, TR=$5,447.

b. At P=$4.80, TR=$1,163; at P=$3.81, TR=$755

c. At P=$4.80, TR=$2,798; at P=$3.81, TR=$2,245

d. At P=$4.80, TR=$6,384; at P=$3.81, TR=$7,331

Question 11Question text

What is the total-revenue maximizing price and quantity, and how much revenue is earned there?

Select one:

a. P∗=$3.64, Q∗=1,492, TR∗=$5,398

b. P∗=$4.23, Q∗=1,389, TR∗=$5,631

c. P∗=$3.72, Q∗=1,442, TR∗=$5,432

d. P∗=$4.43, Q∗=1,255, TR∗=$5,555