Consider the following demand function for game consoles: (D): P = 400 - 20Q 1. Assume...

Consider the following demand function for game consoles: (D): P = 400 - 20Q

1. Assume that the price decreases from 150$ to 100$.

a. Calculate the price elasticity of demand.(midpoint method )

b. Is the demand elastic, inelastic or unit elastic?

c. What happens to Total Revenue?

2. Assume that the price decreases from 75$ to 50$.

a. Calculate the price elasticity of demand.(mid point method )

b. Is the demand elastic, inelastic or unit elastic?

c. What happens to Total Revenue?

Expert Solution

Rahul Sunny answered 6 months ago

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