Homework Sourse1005 PM 100 eztomheducationcom My Academics CalCentral McG
10:05 PM @ 100%). + ezto.mheducation.com My Academics CalCentral McGraw-Hill Connect Connect | Section Home Homework 1 Econ 10OA: TTH 5:00pm Spring 2018 Konstantin ECONOMIcS Homework 1 instructions help | Question 3 (of 12) Save & Exit Submit 3 alue: 25.00 points Last September, the price of gasoline in Chattanooga rose $1 from the previous year to $2.50 a gallon. At this price, consumers bought 1 million gallons. Suppose the elasticity of demand in September at a price of $2.50 was -0.50, and that the demand function for gasoline that month was linear. a. Which of the following is the linear demand function for gasoline? 1,500,000-0.5P 200,000-250P 1,000,000 200,000F 1,500,000-200,000P b. At what price does consumers\' total expenditure on gasoline reach its largest level? $3.75. $3.50 $1.00 $2.75. eBook & Resources 
Solution
Ans1) ans is D because when P=2.5 then quantity demanded=1000000 which is satisfied only by 4th option.
I.e. Put P=2.5 then demand=1000000
B) TR=PQ=P(1500000-200000P)=1500000P-200000P2
Total revenue is maximised when dTR/dP=0
Differentiating with P we get
1500000-400000P=0
P=15/4=3.75
Thus ans is A
