A company that supplies water to a city faces a market demand curve of P = 161-3q. At what price does the company maximise total revenue?

Question

A company that supplies water to a city faces a market demand curve of P = 161-3q. At what price does the company maximise total revenue?
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Solution 1

To find the price that maximizes total revenue, we first need to understand that total revenue is maximized at the point where the price elasticity of demand is unitary (i.e., equal to 1). This occurs at the midpoint of the linear demand curve.

Step 1: Find the quantity where demand becomes zero (q Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study prob

Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study problem.
Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study problem.
Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study problem.
Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solv

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