Assignment:
Suppose that the demand for Cod Liver Oil (CLO) can be written QD =5000-2P (so, the inverse demand curve for CLO is P=2500-0.5QD), where P is the price per ton (in dollars) of CLO and QD is the quantity demanded (in tons) in a period.
Based on this information, create an excel sheet which:
1. Sets up scatterplots of (i) the demand curve and (ii) the corresponding total revenue curve for this market (in two separate diagrams).
2. Calculate price elasticity of demand using the point elasticity formula at the following amounts of CLO along this demand curve:
QD=4000, QD =2500, QD =1000.
Also, calculate totals revenue from sales in this market at each of these quantities: QD=4000, QD =2500, QD =1000.
Attach this excel sheet to your discussion on the point elasticity formula for calculating the price elasticity of demand.