Consider the demand curve Q = 200 - 40P

Subject:EconomicsPrice:2.88 Bought3

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Consider the demand curve Q = 200 - 40P.

a. Draw the demand curve and indicate which portion of the curve is elastic, which portion is inelastic, and which portion is unit elastic.

b. State at which point of the curve expenditures on the goods are maximized, and then explain the logic behind your answer. You can do by either intuitive explanation based on the definition of elasticity or exact calculation total revenue, marginal revenue.