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4) Consider a software firm that is trying to determine the optimal price for one of its popular software programs. Management estimates this product's demand curve to be: Q=1,60004P where Q is copies sold per week and P is price in dollars. a) Drive the total revenue (TR) and Marginal revenue (MR) functions( 2 points) b) Find the quantity demanded and price that make price elasticity of demand unitary elastic. Calculate the value of TR and MR at that level of quantity demanded. (2 points) c) Suppose the software firm is operating originally at the quantity demanded and price that make price elasticity of demand unitary elastic. What happen to elasticity, value of TR, and MR along the above linear demand curve, i) when moving up to a higher price, say 300 Birr; ii) when moving to lower price, say to 100 Birr; iii) Show the Elasticity and TR relationship as well as the liner demand and MR graphically for the case of (i)and (ii) above. ( 3 points) 4) Consider a software firm that is trying to determine the optimal price for one of its popular software programs. Management estimates this product's demand curve to be: Q=1,60004P where Q is copies sold per week and P is price in dollars. a) Drive the total revenue (TR) and Marginal revenue (MR) functions( 2 points) b) Find the quantity demanded and price that make price elasticity of demand unitary elastic. Calculate the value of TR and MR at that level of quantity demanded. (2 points) c) Suppose the software firm is operating originally at the quantity demanded and price that make price elasticity of demand unitary elastic. What happen to elasticity, value of TR, and MR along the above linear demand curve, i) when moving up to a higher price, say 300 Birr; ii) when moving to lower price, say to 100 Birr; iii) Show the Elasticity and TR relationship as well as the liner demand and MR graphically for the case of (i)and (ii) above. ( 3 points)

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