The (inverse) demand for good x is given as P:

P = 156 - 0.2Q

a. If the price of good x is 90, what is the point price elasticity of demand at this price level?

b. How much is the quantity demanded of good x, Q, at this price level?

c. How much total revenues do firms earn if they sell good x at 90/unit?

d. Based on the price elasticity of demand that you calculate in a, should firms raise or lower their price if they want to increase revenues?

e. Suppose firms lower their price for good x by 10% below the current price level of 90. Using the price elasticity of demand that you have calculated, compute the new quantity demanded of good x. How much total revenues do firms earn now after the price decrease?