1 Consider the inverse demand function Pb 290 225 Qb what

1. Consider the (inverse) demand function: Pb = 290 - 2.25 Qb, what is the limit price?

2. Consider the (inverse) demand function: Pb = 11.25 - 45 Qb, what is WTP (willingness to pay) for the buyer purchasing the Q = 12 unit?

3. Consider the (inverse) supply function: Pv = 135 + (16) Qv, what is the reservation price?

1.Limit price is the maximum price that can be charged.

When Qb=0

Pb=290.

Limit price=290

3.Reservation price is the minimum price the seller is Willing to receive.It is determined by the intercept of the supply function.

P=135+16Qv

Intercept=135.

Reservation price=135

Second question is incorrect.

Reservation pri