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Q. 1. ABC Sports, a store which sells various types of sports clothing also other sports items, is planning to introduce a new design of Arizona Diamondbacks' base ball caps. A consultant has estimated the demand curve to be
Q = 2,000 - 100P
where Q is cap sales also P is price.a. Explain how many caps could ABC sell at $6 each?b. Explain how much would the price have to be to sell 1,800 caps?c. Suppose ABC were to use the caps as a promotion. Explain how many caps could ABC give away free?
2. Mr. Smith has the subsequent demand equation for a certain product: Q = 30 - 2P.
a. At a price of $7, illustrate what is the point elasticity?b. Between prices of $5 also $6, Illustrate what is the arc elasticity?c. If the market is made up of 100 individuals with demand curves identical to Mr. Smith's, Illustrate what will be the point also arc elasticity for the conditions specified in parts a also b?
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