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The market research conducted by a firm in the drinking water industry shows that the demand for water has a constant elasticity equal to -1/?? where ?? is 7.
a) Express the demand function in the form of a differential equation.
b) Find the general solution for the differential equation by expressing Q (the quantity demanded) as a function of P (the product price).
c) Suppose that the demand for bananas has a constant elasticity equal to -c (c=7). Explain in words (without providing any calculation) how decreasing the price would affect a banana seller's total revenue and profits.
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