3. Suppose than an oligopolist is charging $21 per unit of output and selling 31 units each day. What is its daily total revenue? Also suppose that previously it had lowered its price from $21 to $19, rivals matched the price cut, and the firm’s sales increased from 31 to 32 units. It also previously raised its price from $21 to $23, rivals ignored the price hike, and the firm’s daily total revenue came in at

$482. Which of the following is most logical to conclude?

The firm’s demand curve is

(a) inelastic over the $21 to

$23 price range,

(b) elastic over the $19 to $21 price range,

(c) a linear (straight) downsloping line, or

(d) a curve with a kink in it? LO5