Suppose the demand function for Good X was given by: QDx = 58 - 4Px.Calculate the reservation price for the 38th unit.(Do not include a $ sign in your response.)

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We start by restating the problem to ensure clarity: the demand function is QDx = 58 - 4Px, and we want the reservation price for the 38th unit.

Step 1: Recognize that the reservation price for the nth unit corresponds to the inverse demand evaluated at Q = n. In other words, solve the demand equation for Px as a function of Q, then substitute Q = 38.

Step 2: Solve for Px from QDx = 58 - 4Px. Rearranging gives 4Px = 58 - QDx, so Px = (58 - QDx)/4.

Step 3: Substitute QDx = 38 into the inverse demand: Px = (58 - 38)/4.

Step 4: Compute the arithmetic: 58 - 38 = 20, and 20/4 = 5.

Step 5: The result is the price level at which the 38th unit would be purchased under this demand schedule; this value represents the reservation price for the 38th unit.

Note: If you were considering discrete units, the reservation price for the 38th unit is the price that would make a buyer just willing to purchase the 38th unit, given the linear demand relation provided. The calculation above follows directly from the inverse demand function derived from the given QDx equation.

ECON 302 AL1 SP25: Inter Microeconomic Theory (Buckley, B)

Suppose the demand function for Good X was given by: QDx = 58 - 4Px.Calculate the reservation price for the 38th unit.(Do not include a $ sign in your response.)

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ECON 302 AL1 SP25: Inter Microeconomic Theory (Buckley, B)

Suppose the demand function for Good X was given by: QDx = 58 - 4Px.Calculate the reservation price for the 38th unit.(Do not include a $ sign in your response.)

View Explanation

Log in for full answers

Similar Questions

The image above shows which demand curve?

Suppose the demand equation for a product is given by: Qd = 50 - 12\frac{1}{2}P b) Calculate the price at which consumers would demand 10 units of the product. Price: $ [Fill in the blank],

Suppose that a consumer had a utility function given by: U=X2Y4. This consumer has a budget of $12.Fill in the value of this consumer's demand function. X = Answer Question 3[input]*(1/Px).(For instance, if X = 4/Px, then X = 4 * (1/Px) and enter 4)

Suppose the demand for a good was given by the function: QD = 230 - 0.1 P.Calculate the choke price of this demand function.(Do not include a $ sign in your response.)

The demand function for this good is given by: QD= 225 -0.5P. Find quantity demanded when price is $300.

More Practical Tools for Students Powered by AI Study Helper

Making Your Study Simpler

Suppose that a consumer had a utility function given by: U=X2Y4. This consumer has a budget of $12.Fill in the value of this consumer's demand function. X = Answer Question 3[input](1/Px).(For instance, if X = 4/Px, then X = 4 (1/Px) and enter 4)