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- DHL Company specializes in rapid parcel delivery. Cross sectional data from DHL’s regional hub in...

- DHL Company specializes in rapid parcel delivery. Cross sectional data from DHL’s regional hub in Palestine were used to estimate the demand equation for the company’s services. Holding income and prices of other goods constant, the demand equation is estimated to be P = 66Q -1 /3 where P is the price per pound and Q is pounds delivered. The marginal cost of delivery is constant and equal to $2 per pound.

a. What is the point-price elasticity of demand?

b. What are the profit-maximizing price and quantity?

c. What are the total revenue maximizing price and quantity?

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