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HW_ch4 - something that will shift the total revenue...

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Homework Question for Chapter 4 1. Given the demand curve Q D = 300 - 2 P answer the following questions. (a) Calculate the elasticity of demand when Price increases from $8 to $10, is the elasticity of demand elastic, inelastic or unit elastic at this point? Explain. (b) By what percentage will the price increase in (a) changed total revenue? (c) Over what range of prices is the demand for this product elastic, inelastic and unit elastic? (d) Draw the Total Revenue curve that corresponds to this demand curve.
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Unformatted text preview: something that will shift the total revenue curve. (e) Demonstrate on the Total Revenue curve the effect from raising the price from $8 to $10. (f) Compared to the demand curve above, Q D = 300-2 P , is the demand curve Q D = 300-3 P more or less elastic? Explain. What assumption do you need to compare the elasticity of these two demand curves?...
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