All dollar responses should be entered as whole numbers. Include a minus (-) sign for all negative answers.

a. How much would the firm’s revenue change if it lowered price from $12 to $10? Is demand elastic or inelastic in this range?

Revenue change: $


b. How much would the firm’s revenue change if it lowered price from $4 to $2? Is demand elastic or inelastic in this range?

Revenue change: $


c. What price maximizes the firm’s total revenues? What is the elasticity of demand at this point on the demand curve?

Price that maximizes total revenues: $

Answer the following questions based on the accompanying diagram: Price ($) 20 18- 18- 14- 12- 10- 4 - 2 - D 2 4 7 Quantity