Question: andnbspthe demand for pumpkins in halloweenstan is given by qd...
The demand for pumpkins in Halloweenstan is given by:
QD = 60 – 2P
1: Compute the price elasticity of demand first when the quantity of pumpkins demanded is Q1 = 20, and then when the quantity demanded is Q2 = 5.
2: Is demand inelastic or elastic at each point (that is, at Q1 = 20 and at Q2 = 5)?
3: What is the total revenue at Q1 = 20 and then at Q2 = 5, respectively?
4: Is the total revenue maximised at either Q1 = 20 or Q2 = 5? Why?