ECON 103

Assignment for Week 5 Due < 5 p.m., 3/2/00

Given: P = 60 - .005Q or Q = 12,000 – 200 P

 

  1. Use the spreadsheet that you developed the second week of class. Check the instructions that are posted to week 2 of your online syllabus. (Click on "Class Exercise for Week 2" and "Another Class Exercise for Week 2.") Be sure that you have completed both exercises for Week 2 before you start the elasticity formulas.
  2. Enter arc elasticity 1 (e = (D Q/S Q)/(D P/S P) in last column of your completed class exercise for Week 2. Start this is the first row of your spreadsheet where Q = 0.
  3. Enter arc elasticity 2 (e = (D Q/S Q)/(D P/S P) in the next column. E. Use the same formula for arc elasticity 1, but start in the 2nd row of your spreadsheet.
  4. Enter arc elasticity 3, which is the average of the last 2 columns (This produces elasticity at midpoints.) Start in the 2nd row of your spreadsheet.
  1. Calculate point elasticity (e = dQ/dP x P/Q) in the next column of your spreadsheet.
  2. Clean up your spreadsheet (i.e. format the numbers, add the appropriate headings and borders).
  3. Shade the row that maximizes total revenue (TR) light blue.
  4. Save your file as YourlastnameA5.xls and e-mail it to me before 5 p.m., (Thursday) March 2, 2000. Be sure that you turn in your completed class exercises for week 2 as well as what I asked you to add for this assignment.