1. What is the income elasticity of car as per capital income increases from, $10,000 to $11,000? The demand for car as a function of income per capital is given by the equation. Q= 50,000 +5(y).
2. The demand for a Laptop in Adama is estimated to be QD= 250,000 –35P if this relationship remains approximately valid in the future. What is the point price elasticity of demand at price of $2000? Interpret your result.
3. Suppose Y company estimates the following total cost function from cost output data:
TC = $135,000 + $250Q + $1.5Q2. Find the optimum level of output that makes the company efficient and per unit cost (AC) at the rate of output.
5. Given the following demand function Q = 20 – 0.10p where p = price and Q = rate of output,
A, Complete the following table.
Quantity Price Total Revenue Average Revenue Marginal Revenue
1 190 190 190 -10
2 180 360 180 -10
3 170 510 170 -10
4 160 640 160 -10
5 150 750 150 -10
4. A monopolist's demand function is given by P = 80 – 4Q. The firm's total cost is given by TC = 10Q + Q2
A. What is the profit-maximizing price and quantity?