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P=50 – 0.5QD

QS= -20 + 2P

where, P is the price in pounds, QS is the quantity supplied and QD¬ is the quantity demanded.

(a) What is the equilibrium price and quantity?

(b) What is the price elasticity at a price of £35?

(c) What do you expect will happen to total expenditure on this good if the price increases from £35 to £40? Is this expectation confirmed if you calculate the total revenue for each price?