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During spring break-students have elasticity of demand

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1. During spring break, students have an elasticity of demand for a trip to Florida of -3. How much should an airline charge students for a ticket if the price it charges the general public is $300? Assume the general public has an elasticity of -1.5. a. $150. b. $250. c. $350. d. $90

2. Assume a firm in a perfectly competitive market has the short-run total cost function TC = 100 + 180Q + 8Q2. If the market price is $340, what should it do? a. produce 5 units per time period. b. produce 10 units per time period. c. produce zero units (i.e., shut down) because profit is negative d. cannot be determined from the above information.

Reference no: EM131393496

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