Managing Finance Questions 2022

Running head: MANAGING FINANCE
Managing Finance
Name of the Student
Name of the University
Course ID

MANAGING FINANCE1
Table of Contents
Pricing Analysis...............................................................................................................................2
Question 1....................................................................................................................................2
Question 2....................................................................................................................................3
Question 3....................................................................................................................................4
Question 4....................................................................................................................................4
Question 5....................................................................................................................................5
Question 6....................................................................................................................................7
Question 7..................................................................................................................................10
Question 8..................................................................................................................................10

MANAGING FINANCE2
Pricing Analysis
Question 1
The demand function is given as
Q=200−5 P
From the demand function, the inverse demand function can be determined as
P= 200−Q
5
¿ 40−0.2 Q
From the demand function, total revenue can be obtained as
Total Revenue ( TR )=Price× Quantity
¿ ( 40−0.2 Q ) × Q
¿ 40 Q−0.2Q2
The first order condition for revenue maximization is
d ( TR )
dQ =0
¿ , d ( 40 Q−0.2 Q2 )
dQ =0
¿ , 40−0.4 Q=0
¿ , 0.4 Q=40

MANAGING FINANCE3
¿ , Q= 40
0.4
¿ , Q=100
Given the quantity, price can be determined as
P=40−0.2Q
¿ 40− ( 0.2 ×100 )
¿ 40−20
¿ $ 20
From the price and quantity, obtained level of revenue is
TR=P × Q
¿ $ 20 ×100
¿ $ 2000
Revenue is maximized at the quantity of 100. The maximum level of revenue is $2000
Question 2
The demand function is given as
Q=200−5 P
From the demand function, slope of the demand function is obtained as
dQ
dP =−5