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The demand curve is: Qd = 500 - 1/2 P.
a. Calculate the (point) price elasticity of demand when price is $100. Is demand elastic or inelastic?
b. Calculate the (point) price elasticity of demand when price is $700. Is demand elastic or inelastic?
c. Find the point at which point elasticity is equal to -1.
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Each firm can monitor the other's price very closely and can respond instantly
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