I estimate the following demand function for a watch I produce and sell:

Q = 10000 - 4P +200PR

Where:

Q = quantity demanded in units

P = price in dollars

PR = number of YouTubers who positively review my watch

We are currently operating at the following values:

P = $400

PR = 10

In addition, suppose MC is $300.

Given all this, please answer the following questions:

1. (1 point) Derive the firm's current demand curve and calculate and interpret the firm's current price elasticity of demand. Be as precise as you can with your elasticity interpretation.

1. (1 point) Given my answer in b, should the firm increase or decrease output to maximize profits(NOT revenues)? Explain and show your work on a well-labeled graph. Hint: your graph should indicate the current output level and the profit-maximizing output level.

1. (2 points) What is the profit-maximizing output and price? Show and explain all your work and match up your answer to your work in part b.

1. (2 points) Suppose I want also to incorporate YouTubers who give a negative review. How would I go about doing so and what do you think the impact of this would be relative to positive reviews? Note:there isn't just one clear answer.

1. (2 points) What is the conceptual difference between an increase in demand and demand becoming more inelastic? Provide an example of a factor that could cause and increase in demand, and then provide a different example of a factor that caused demand to become more inelastic.