question 1 10 points consider the following demand curves where p is price in dollars and q is quantity in units a q 200 p b q 200 0 5p calculate the own price elasticity of demand at a price of 20 for each of the demand cu
Question 1
. [10 points] Consider the following demand curves (where P is price in
dollars and Q is quantity in units):
(A)
Q = 200 – P
(B)
Q = 200 – 0.5P
Calculate the own price elasticity of demand, at a price of $20, for each of the demand
curves.
Question 2
. [10 points] The owner of a baseball team and local stadium has
commissioned a study that showed the demand by fans for stadium seats (per playing
date) to be P = 22 – 0.2Q, where P is the average price of a ticket and Q represents the
number of seats (expressed in thousands). The local stadium seats a maximum of 56,000
per game. Suppose the owner offers you 10% of the revenues. If you can only choose a
uniform per-ticket price, what is the maximum amount you can earn per game? (Note:
Assume that all seats and all games are the same in this problem.)
