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Demand Curve and Price Elasticity

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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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Solution Summary

Using the demand curve and price elasticity to solve each part of the word problem.

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a. How many T-shirts could KRDY-FM sell at $4 each?

P = 4 and plug into demand curve:
Q = 3000 - 500(4) = 3000 - 2000 = 1000

b. What price would KRDY-FM have to charge to sell 2,000 T shirts?

Here we know Q, but must solve for P
2000 ...

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