. The demand curve for a product is given by Q=1,000 - 2P, +.02P where P, = $400. a. What is the own price elasticity of demand when P, = $154? Is demand elastic or inelastic at this price? What would happen to the firm's revenue if it decided to charge a price below $154?
. The demand curve for a product is given by Q=1,000 - 2P, +.02P where P, = $400. a. What is the own price elasticity of demand when P, = $154? Is demand elastic or inelastic at this price? What would happen to the firm's revenue if it decided to charge a price below $154?
Chapter5: Elasticity Of Demand And Supply
Section: Chapter Questions
Problem 2.5P: (Determinants of Price Elasticity) Would the price elasticity of demand for electricity be more...
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![Price (S)
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1 2 3 4
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Quantity
2. The demand curve for a product is given by Qd = 1,000 - 2P, +.02P
where P, = $400.
a. What is the own price elasticity of demand when P,= $154? Is demand
elastic or inelastic at this price? What would happen to the firm's revenue
if it decided to charge a price below $154?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4b24c48a-a78e-49a6-9a84-5441382dd879%2F38a0be20-c47a-442a-84ea-82381db6ecc3%2F7kw4i79_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Price (S)
20
18
16
14
12
10
8
6
4
2
1 2 3 4
5 6
Quantity
2. The demand curve for a product is given by Qd = 1,000 - 2P, +.02P
where P, = $400.
a. What is the own price elasticity of demand when P,= $154? Is demand
elastic or inelastic at this price? What would happen to the firm's revenue
if it decided to charge a price below $154?
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