1. Consider the demand equation, Q = 120 4P. If a firm sells at the unit elastic price on this demand curve, what is the total revenue it will receive? The total revenue received at this point would be ____________.

2. (a)

Jaime owns a monopoly business selling sweatshirts. The demand for her product is given by: Q = 1600 20P. She is currently selling sweatshirts at P = $40. What is the price elasticity of demand at this price? You will have to use the point elasticity formula. The price elasticity of demand at this price is ___________

(b)

Consider your answer to the previous question. If Jaime wants to increase the revenue received by her firm, what should she do?

A: She should raise the price of her sweatshirts

B: She should lower the price of her sweatshirts

C: She is already maximizing her revenue and should not change her prices