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3) The “Burger Bar” (located in Macy’s, Union Square, 6th Floor) is the go to place...

3) The “Burger Bar” (located in Macy’s, Union Square, 6th Floor) is the go to place for the ultimate burger experience. On the Menu is the “Rossini Burger” which sells for $60 dollars. The following equation represents the daily demand for Rossini Burgers. ?? =20−.2?

a) Find the price and quantity intercepts.

b) At a price of $60, how many Rossini Burgers are bought each day? Show solution graphically, include intercepts as well.

c) Calculate the price elasticity of demand when P=$60.

d) Is the demand for Rossini Burgers elastic, unit elastic or inelastic?

e) Assume the price of a Rossini Burger is $60. If the price of a Rossini Burger increases by 12%, by how much will the ?? of Rossini Burgers change by, state your answer as a percentage?

f) Find the price that maximizes total revenue. (hint: use the relationship between the demand curve and total revenue curve). Show solution graphically, include: the price, quantity and total revenue.

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