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    Demand Curves

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    Monthly sales data from a T shirt indicate that the demand curve for the T-shirts can be described as:
    Q = 300 - 5P
    where Q is T shirt sales and P is price.

    Please step me through the following calculations:

    - How many T-shirts could the cafe sell at $5 each?
    - What price would they have to charge to sell 200 T shirts?
    - Calculate the own price elasticity of demand for T-shirts at a price of $20.
    - Calculate the inverse demand curve for the restaurant?

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    Solution Preview

    Please see the attached file.


    Given, Q = 300 - 5P

    a) When the price is $5, then the cafe could sell,

    Q = 300-5 * 5
    Q =300-25
    Q =275 T-shirts

    b) In order to sell 200 T-shirts, the respective price should be,


    Solution Summary

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