Problem
Suppose the demand for the IBM personal computer is: Qd = 2400 - 4p
(a) At what price is the price elasticity of demand equal to zero?
(b) When the price elasticity of demand equal to 1, what's the quantity being demand at that point?
(c) Figure out at what price, the price elasticity of demand is infinite, and explain what does infinite price elasticity of demand mean?
(d) What's the change of revenue generated by sale when the price elasticity of demand falls from infinite to 1? (e) Explain how we can account for ‘bads' (such as pollution) in analysis of consumer preferences.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.