Answer to Question #142341 in Finance for Mr. Dinesh Pal Singh

Question

36. A consultant estimates the price-quantity relationship for New World Pizza to be P = 50 –5Q.
i) At what output is demand unitary elastic?
ii) Over what range of output is demand is elastic?
iii) At the current price, 8 units are demanded each period. If the objective is to increase total revenue, should the price be increased or decreased? Explain.

Answer 1

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