Question

Suppose that you have been hired as an economist by OPEC and given the following schedule...

  1. Suppose that you have been hired as an economist by OPEC and given the following schedule showing the world demand for oil: Your advice is needed on the following

Price($/barrel)

Quantity demanded (millions of barrels/day)

10

60

20

50

30

40

40

30

50

20

questions:

  1. What is the elasticity of demand that maximizes total revenue?
  2. Over what range of prices is the demand for oil inelastic?

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