Total Revenue
Worksheet
Name _ Class Date ___
¨ A simple Demand Schedule for a company follows:
__ P Qd__ TR Cost Profit
$6 10
5 11
4 12
3 13
2 14
1 15
1. Find the dollar value of Total Revenue (TR) at each of the six prices. At what price will TR be the greatest? _________________ How many units will sell at that price? __________________
2. If the cost of producing each unit were 50 cents, what price would be the most profitable? _________
¨ A simple Demand Schedule for Suzanne's Hot Fudge Sundaes follows:
___P
Qd__ TR Cost Proft
$2.00 0
1.80 400
1.60 800
1.40 1200
1.20 1600
1.00 2000
.80 2400
.60 2800
3. Find the dollar value of TR at each of the eight prices. At what price will TR be the greatest? _______________________
How many units will sell at that price? ______________________________
4. If the cost of producing each unit were 5 cents, what price would be the most profitable? _____________
5. Using the Demand Schedule above, graph the Demand Curve of Suzanne's Hot Fudge Sundaes:
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6. If Point A has a price of $1.80 (Qd = 400) and Point B has a price of $1.00 (Qd = 2000), then what is the Elasticity of Demand for this product? Would this good be considered elastic? Show you work!!