Use the following data to answer the questions below.P Q$52.50 1130$50.75 1145$49.80 1165$49.15 1170$48.85 1210 Question 1Using

Use the following data to answer the questions below.

P                       Q

$52.50           1130

$50.75           1145

$49.80           1165

$49.15           1170

$48.85           1210

Question 1

Using OLS, the estimated demand function (P=f(Q))(◂=▸P=f⁡(Q)) is

Select one:

a. P=1210−48.85Q◂=▸P=1210−48.85⁢Q

b. P=100.15−0.043Q◂=▸P=◂#▸100.15−0.043⁢Q

c. Q=2334.34−23.31P◂=▸Q=◂#▸2334.34−23.31⁢P

d. Q=52.50−0.05P◂=▸Q=52.50−0.05⁢P

Question 2

Using algebra to invert the demand function, the demand function (Q=f(P))(◂=▸Q=f⁡(P)) is

Select one:

a. P=1130−52.50Q◂=▸P=1130−52.50⁢Q

b. Q=100.15−15.38P◂=▸Q=◂#▸100.15−15.38⁢P

c. Q=6.51−0.007P◂=▸Q=6.51−0.007⁢P

d. Q=2334.34−23.31P◂=▸Q=◂#▸2334.34−23.31⁢P

Question 3

Using calculus to determine dQdP◂/▸d⁢Qd⁢P, construct a column which calculates the point-price elasticity for each (P,Q) combination. What is the point price elasticity of demand when P=$49.80P=$49.80?

Select one:

a. -0.996

b. 1165

c. 0.186

d. -0.043

Question 4

What is the point price elasticity of demand when P=$51.00P=$51.00?

Select one:

a. 1.852

b. -1.038

c. -0.02

d. 1145

Question 5

To maximize total revenue, what would you recommend if the company was currently charging P=$49.15P=$49.15? If it was charging P=$51.00P=$51.00?

Select one:

a. Price should be lower than both $49.15 and $51.00.

b. Price should be raised above both $49.15 and $51.00.

c. Lower the price if it is currently $49.15; raise the price if it is currently $51.00.

d. Raise the price if it is currently $49.15; lower the price if it is currently $51.00.

Question 6

Use your first demand function to determine an equation for TRT⁢R and MRM⁢R as functions of QQ. What is total revenue when P=$52.50P=$52.50 and when P=$51.00P=$51.00?

Select one:

a. At P=$52.50P=$52.50, TR=$61,487◂,▸T⁢R=$61,487; at P=$51.00P=$51.00, TR=$62,985◂,▸T⁢R=$62,985.

b. At P=$52.50P=$52.50, TR=$58,386◂,▸T⁢R=$58,386; at P=$51.00P=$51.00, TR=$58,425◂,▸T⁢R=$58,425.

c. At P=$52.50P=$52.50, TR=$34,995◂,▸T⁢R=$34,995; at P=$51.00P=$51.00, TR=$38,163◂,▸T⁢R=$38,163.

d. At P=$52.50P=$52.50, TR=$52,343◂,▸T⁢R=$52,343; at P=$51.00P=$51.00, TR=$51,873◂,▸T⁢R=$51,873.

Question 7

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

Select one:

a. P∗=$49.27P∗=$49.27, Q∗=1168Q∗=1168, TR∗=$57,122◂=▸T⁢R∗=$57,122

b. P∗=$50.07P∗=$50.07, Q∗=1,167◂,▸Q∗=1,167, TR∗=$58,445◂=▸T⁢R∗=$58,445

c. P∗=$47.54P∗=$47.54, Q∗=1263Q∗=1263, TR∗=$59,008◂=▸T⁢R∗=$59,008

d. P∗=$51.72P∗=$51.72, Q∗=1,472◂,▸Q∗=1,472, TR∗=$59,273

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