4. (6 points) Suppose the Demand for baseballs is given by Q = 120 - 4P. a) What is the price elasticity of demand...

Question

Question

Answer 1

Answer #1

a. Price elasticity of demand = -0.43

b. Total Revenue gets maximized at a price equal to 15

c.

TR = Q*P = (120-4P)P = 120P-4P^2
MR = 120-8P

So, at a price = 12,

MR = 120-8*12 = 24

Answer 2

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