What price and quantity maximize total revenue

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1. Alexander Machine Tool faces the demand curve P = $70 - 0.001Q. What price and quantity maximize total revenue? What is the price elasticity at this point?

2. Studies indicate that the income elasticity of demand for servants in the United States exceeds 1. Nevertheless, the number of servants has been decreasing during the last 75 years, while incomes have risen significantly. How can these facts be reconciled?

Reference no: EM13921759

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