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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 =300 - 50P 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 $3? Develop a numerical example

that suggests that total spending on pasta is as large as possible at this price.

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