Intek Corporation produces memory chips. Using product sale data, the company's economist estimates the inverse demand function for the memory chips to be P = 200 - (1/4)Q. Intek is currently charging $140 per memory chip and the marginal cost is estimated to be $80 per unit.

1. Graph the inverse demand curve for memory chips. Find the company's total revenue and profit given the current price level.
2. Calculate the price elasticity of demand at the current price and quantity level. Interpret your results.
3. Do you expect the total revenue to increase or decrease if price were to decrease to $130? Mark on the graph and calculate the price and quantity effect.
4. Has the firm priced the memory chips correctly at P=$140 or do you recommend a different price? Explain