1. Below is the price and quantity information a firm. For example, at a price of $2.80, 60 units are sold.

P₁ = 3.20 Q₁ = 40

P₂ = 2.80 Q₂ = 60

P₁ = 2.20 Q₁ = 90

P₂ = 1.80 Q₂ = 110

P₁ = 1.20 Q₁ = 140

P₂ = 0.80 Q₂ = 160

a. Construct the demand curve for this firm with P on the vertical and Q on the horizontal axis.

b. Using the equation for PED, calculate the price elasticity of demand. Use absolute value to determine and describe the range of elasticity.

c. Using the results from "b" and the equation for TR, analyze the relationship between the ranges of elasticity and revenues.

d. Using the graph from "a" and the analysis from "c," predict the price this firm will likely charge customers. Why?