Demand Curve and Price Elasticity
A radio station that goes by the name KRDY-FM is
contemplating a T shirt advertising promotion. Monthly sales data from T shirt
shops marketing the “Listen to KRDY-FM” design indicate that the
demand curve for the T-shirts can be described as:
Q = 3,000 – 500P
Where: Q is T shirt
sales and P is price.
a. How many
T-shirts could KRDY-FM sell at $4 each?
b. What
price would KRDY-FM have to charge to sell 2,000 T shirts?
c. Calculate
the own price elasticity of demand at a price of $4.
d. What is
the inverse demand curve for the radio station?
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