A restaurant that goes by the name Soft Rock Cafe is contemplating a T-shirt advertising promotion. Monthly sales data from T-shirt shops marketing the "Barry Manilow Eats at Soft Rock" design indicate that the demand curve for the T-shirts can be described as:
Q = 4,000 - 500P where Q is T-shirt sales and P is price. -v
Q1. How many T-shirts could the cafe sell at $5 each?
Q2. What price would Soft Rock have to charge to sell 2,000 T-shirts?
Q3. Calculate the own price elasticity of demand when the price goes from $5 to $4.