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Demand for a softback managerial economics text is given by Q=20,000-300P. The book is initially priced at $30.
a. Compute the point price elasticity of demand at P= $30.
b. If the objective is to increase total revenue, should the price be increased or decreased? Explain.
c. Compute the arc price elasticity for a price decrease from $30 tp $20.
d. Compute the arc price elasticity for a price decrease from $20 to $15.
If planned aggregate expenditure (PAE) in an economy equals 2,000 + 0.48Y and potential output (Y*) equals 4,000, then this economy.
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