Question
Suppose that the market demand curve for pasta is a straight line of the form Q = 3 0 0 - 5 0
Suppose that the market demand curve for pasta is a straight line of the form Q P where Q is the quantity of pasta bought in thousands of boxes per week and P is the price per box in dollars Show the steps.
a At what price does the demand for pasta go to zero? Is demand elastic,
inelastic or unit elastic at this point?
b How much pasta is demanded at a price of zero? Is demand elastic, inelastic
or unit elastic at this point?
c How much pasta is demanded at a price of $ Develop a numerical example
that suggests that total spending on pasta is as large as possible at this price.
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