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Intermediate Microeconomics and Its Application 12th Edition by Walter Nicholson,Christopher Snyder
Edition 12ISBN: 978-1133189022Intermediate Microeconomics and Its Application 12th Edition by Walter Nicholson,Christopher Snyder
Edition 12ISBN: 978-1133189022 Exercise 31
Suppose that a firm faces a demand curve that has a constant elasticity of -2. This demand curve is given by
q = 256/P 2
Suppose also that the firm has a marginal cost curve of the form
MC = 0.001 q
a. Graph these demand and marginal cost curves.
b. Calculate the marginal revenue curve associated with the demand curve; graph this curve. (Hint: Use Equation for this part of the problem.)
c. At what output level does marginal revenue equal marginal cost?
q = 256/P 2
Suppose also that the firm has a marginal cost curve of the form
MC = 0.001 q
a. Graph these demand and marginal cost curves.
b. Calculate the marginal revenue curve associated with the demand curve; graph this curve. (Hint: Use Equation for this part of the problem.)
c. At what output level does marginal revenue equal marginal cost?
Explanation
Verified
Verified
The demand curve is given by: 
The Margi...
Intermediate Microeconomics and Its Application 12th Edition by Walter Nicholson,Christopher Snyder
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