1. During spring break, students have an elasticity of demand for a trip to Florida of -3. How much should an airline charge students for a ticket if the price it charges the general public is $300? Assume the general public has an elasticity of -1.5. a. $150. b. $250. c. $350. d. $90
2. Assume a firm in a perfectly competitive market has the short-run total cost function TC = 100 + 180Q + 8Q2. If the market price is $340, what should it do? a. produce 5 units per time period. b. produce 10 units per time period. c. produce zero units (i.e., shut down) because profit is negative d. cannot be determined from the above information.