Suppose demand for hamburgers is: Q = 16 ? P 2.

a) How many hamburgers do you sell if the price is P = 2? What is your total revenue?

b)What is the elasticity of demand for hamburgers at P = 2? Is demand on the elastic or inelastic region of the demand curve?

c) Suppose price increases by 10%. Use the elasticity of demand to show what you expect to happen to quantity (roughly). Use this to predict what will happen to total revenue and explain why