Elasticity (related to Total Revenue): (Please show your decision rule

and number that help you make the judgment)- remind you to consider the

relationship between Elasticity and Total Revenue, i.e. calculation of the elasticity

may not be necessary The demand schedule for a specific computer software is as follows

Price (per copy of software) Quantity demanded (in million)

300 50

450 45

500 42

650 34

700 30

a. What type of elasticity (elastic, inelastic or others) is this demand if the price of

this software falls from $650 to $500? explain why.

b. What type of elasticity (elastic, inelastic, or others) is this demand if the price

of this software falls from $700 to $650? explain why.

c. At what price is total revenue a maximum? (Show your calculation/

numbers)

d. What quantity of software will be sold at the price that achieves the maximum

revenue? (show your calculation/ numbers)

e. At an average price of 600, is the demand for this software elastic or inelastic

or others? Use the total revenue test to answer this question.