. 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?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

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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