Question: Allied Electric Co. is developing a new design for its portable electric hair-dryer Test market data indicate a demand for the new hair-dryer as follows:

Allied Electric Co. is developing a new design for its portable electric hair-dryer

Test market data indicate a demand for the new hair-dryer as follows:

Q=30,000- 1,000P

where

Q is hair-dryer sales and

P is its price.

How many hair-dryers could Allied sell at Rs. 22.50 each?

What price would Allied have to charge to sell 12,000 hair-dryers?

(iii) At what price would hair-dryer sales be zero?

(iv) Calculate point price elasticity of demand at a price of Rs. 20

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