Solution for QID #79595: Aruna owns Pottery Plus, a small firm that produces terra co | StudyHelpMe

Aruna owns Pottery Plus, a small firm that produces terra cotta pots for sale in the Edmonton area. The graph below shows Aruna's demand curve. Price ($) 40 36 (36,37) 32 28 24 20 16 12 8 4 ? 0 4 8 12 16 20 24 28 32 36 40 Quantity per period a. If the firm wishes to maximize its total revenue, at what price should it sell its pots? What is its total revenue? $ b. Suppose that the firm were to increase its price by $4 from the price in (a). What will be the change in its total revenue? Give your answer as an absolute number. What is the co-efficient for the price elasticity of demand between those two prices? Round your price answer to two decimal places. c. Suppose that the firm were to decrease its price by $4 from the price in (a). What will be the change in its total revenue? Give your answer as an absolute number. What is the co-efficient for price elasticity of demand between those two prices? Round your price answer to two decimal places.