The Dolan Corporation, a maker of small engines, determines that in 2012 the

demand curve for its product is

P = 2,000 – 50Q

where P is the price (in dollars) of an engine and Q is the number of engines

sold per month.

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CHAPTER 2: DEMAND THEORY

To sell 20 engines per month, what price would Dolan have to charge?

If managers set a price of $500, how many engines will Dolan sell per month?

What is the price elasticity of demand if price equals $500?

At what price, if any, will the demand for Dolan’s engines be of unitary

elasticity?