Question
1.(20 total points) Suppose the demand for a product is given by Q D = 50 - (1/2)P. a)(10 points) Calculate the Price Elasticity of
1.(20 total points) Suppose the demand for a product is given by QD = 50 - (1/2)P.
a)(10 points) Calculate the Price Elasticity of Demand when the price is $40.
b) (5 points) What price should the firm charge if it wants to maximize its revenue?
c) (5 points) Over what price range is demand elastic?
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Macroeconomics A European Perspective
Authors: Olivier Blanchard, Alessia Amighini, Francesco Giavazzi
4th Edition
1292360895, 9781292360898
