Charges a price of $100 per unit of output, and its revenue (price multiplied by quantity) is $70,000. At that price it faces an elastic demand (�Q,P � �1). If the firm were to raise its price by $2 per unit, which of the following levels of output could the firm possibly expect to see? A) 400 b) 600 c) 800 d) 1000 2.16. Gina usually pays a price between $5 and $7 per gallon of ice cream. Rufus Reid Evolving Bassist Ebook Login.

Over that range of prices, her monthly total expenditure on ice cream increases as the price decreases. What does this imply about her price elasticity of demand for ice cream? Consider the following demand and supply rela- tionships in the market for golf balls: Qd � 90 � 2P � 2T and Qs � �9 � 5P � 2.5R, where T is the price of titanium, a metal used to make golf clubs, and R is the price of rubber. A) If R � 2 and T � 10, calculate the equilibrium price and quantity of golf balls. B) At the equilibrium values, calculate the price elasticity of demand and the price elasticity of supply.