Harry and Sally originally charged $20 per dog-walk, but decided to reduce the price to $15 shortly after they started their business. At $20 per dog-walk, they averaged 450 walks per month. After reducing their price to $15 per dog-walk, they averaged 780 walks per month.

1. 1. Assuming a linear demand function, plot the demand curve below based on the 2 observations above
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3. 2. What is the slope of the demand curve plotted above?
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   3. What is the Maximum Willing to Buy (MWB) for H&S dog-walks?
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   4. What is the Maximum Reservation Price (MRP) for H&S dog-walks?
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   5. What is the optimal price to maximize profit for H&S dog-walks?
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   6. How many dog-walks would H&S sell at the optimal price?
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   7. What total profit would H&S realize at the optimal price? (assume original costs for this case)
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   8. What is the elasticity of price for H&S dog-walks?
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    9. Assuming a linear demand curve, and based on price alone, what volume of walks would you predict if H&S started charging $14 per walk?
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    10. Assuming a linear demand curve, and based on price alone, what volume of walks would you predict if H&S started charging $16 per walk?
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    11. Imagine that H&S hired 3 dog-walkers and guaranteed them each 300 walks per month. What price would H&S need to charge to sell the 900 walks per month?
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    12. What total profit would H&S realize at the price needed to sell 900 walks per month? (assume original costs for this case)