Problem: The monthly wholesale demand for beef in the Honolulu market are shown below.
Quantity of Fresh Beef Price of Fresh Beef in
Sold in 1000 lbs Dols. per Pound
10 10
10 9
10 8
20 9
20 8
30 8
30 7
30 6
40 7
40 6
40 5
50 7
50 6
50 5
60 7
60 6
60 5
60 4
70 6
70 5
70 4
Problem 1. Find the inverse demand function of the form P=a-bQ
Problem 2. Identify the price and quantity that maximizes revenue
Problem 3. What is the maximum revenue in (2) above
Problem 4. what is the price elasticity of demand in (2) above
Problem 5. If a retail merchant buys 30 thousand pounds in the wholesale market, what price does he pay?
Problem 6. If he sells the same (No.5) in the retail market what price does he charge to maximize his profit
Problem 7. What is the percentage mark-up.