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Fran runs a doughnut shop in a tiny 3-person town. The table below shows the quantity demand by the three townspeople at various prices.
a) When the price of a doughnut is 50 cents, what is the market demand for doughnuts?
b) Draw the demand curve for each individual on one figure, then derive the market demand. Use excel chart that I can edit
c) Compute the elasticity of demand for P = $0.25 and P = $0.50. Which price yields a more elastic demand?
d) Based on your computations for demand elasticity, if the current price is 35 cents, would Fran increase her revenue by increasing or decreasing prices?
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