Please answer #1

PROBLEM SET 2 Elasticity Department of Economics Temple University Professor William J. Stull Economics 3501 A. Fondue Garden of Edam sells fondue kits over the internet. The demand function for this product is Q= 20 - (1/3)P, where Q is the number of kits sold per week and P is the price per kit. 1. Solve for the inverse demand function. 2. What is the slope of this relationship in the standard P/Q diagram? 3. Compute the point price elasticity of demand (PED) when Q =20 Q=6 4. Compute the point PED when P = 30 and P = 60 5. Give a one sentence (exact) quantitative interpretation of the Q = 6 elasticity