1. DRQ #4 AGEC 317 4pts September 12, 2013
Given the demand function, Q = 8000 – 400P:
(½pt) (a) What is the inverse demand function?
(½pt) (b) Derive the expression for total revenue in terms of quantity.
(½pt) (c) Calculate the general expression for the own-price elasticity in terms of P and Q.
(½pt) (d) If P = $7, what is the own-price elasticity?
(½pt) (e) Is the demand for the commodity inelastic or elastic? Q
400
P= Q or P=20-
TR=20Q-.0025Q2
Max TR=40,000
DQ P
DP Q
-400P Q =
-400(7)
5200
=-.538
Inelastic

2. DRQ #4 AGEC 317 4pts September 12, 2013
Given Qd = 300,000 – 1,200P, Qs = -100, P:
(½pt) (a) What is the market equilibrium price?
(½pt) (b) What is the market equilibrium quantity?
(½pt) (c) What happens when P = $150?
Solve Qd=Qs=> 300,000-1, 200P=-100, P
400,000 = 2,000P
P = 200
Q=60,000
Qd=120,000; Qs=20,000
Qd>Qs Shorage