Answer the questions (1-2) based on the following equation:

P=36−4 Q
1. Find the marginal revenue (MR) function.
MR=36−8Q
2. Find the approximate change in TR that results from decrease in
Q from 3 to 1.
ΔTR=MR×ΔQ
ΔTR=(36−8Q)× ( 1−3 )
ΔTR=(36−8(3))×−2
ΔTR=−24

Answer the questions (1-4) based on the following equation:

P=√ 40−10Q
1. Calculate the value of elasticity at Q = 1.5
ΔQ P
e= ×
ΔP Q
ΔP −10
=
ΔQ 2 √ 40−10 Q

ΔQ 2 √ 40−10 Q
=
ΔP −10

P=√ 40−10(1.5)=5
ΔQ P
e= ×
ΔP Q

2 √40−10 Q 5
e= ×
−10 1.5
2 √40−10(1 .5 ) 5
e= ×
−10 1 .5
10 5 50
e= × = =−3.33
−10 1. 5 −15

|e|=|−3.33|=3.33>1 elastic
 2. Is demand elastic? Yes

3. Calculate the percentage change in Q if P decrease by 6%.

%ΔQ
e=
%ΔP
%ΔQ
−3.33=
−6%
%ΔQ=−3.33×−6%=19.98%

4. If price decrease, then:

a. TR increase

Answer the questions (1-3) based on the following equation:

CT = 052. Q 2+5Q001
+
1. Find the marginal cost (MC) function.
MC=0.5Q+5
2. Find the value of MC at Q = 12
MC=0 . 5(12)+5=11
3. Find the approximate change in TC that results from increase in
Q by 20 units.
ΔTC=MC× ΔQ
ΔTC=11×20=220