The table below shows the hypothetical prices and quantities demanded of a software product. Assume that the fixed cost of setting up the production of software is $200 and the marginal cost is $5.

1. Fill out the table by calculating the revenue, the marginal revenue, the marginal cost, and the profit.
2. Give a general definition of price elasticity of demand. Explain the factors that make the demand of the product more elastic.
3. Calculate the own price elasticity of increasing the price from $0 to $5, from $5 to $10, etc., from $35 to $40. In which price region is the demand for the product elastic and in which region is it inelastic?
4. Conduct a stay even analysis by calculating the critical loss from increasing the price from $30 to $35. How much business can the software company afford to lose by increasing the price in order to maintain its profit?

Price ($)	Quantity sold	Revenue	MR	MC	Profit	Elasticity
40	0
35	10
30	20
25	30
20	40
15	50
10	60
5	70
0	80