In Example 7.1, we assumed that two points on the demand curve were given (see Figure 7.8). Suppose three additional points are estimated by Madison: (1) demand of 460 when price is $65, (2) demand of...

In Example 7.1, we assumed that two points on the demand curve were given (see Figure 7.8). Suppose three additional points are estimated by Madison: (1) demand of 460 when price is $65, (2) demand of 355 when price is $75, and (3) demand of 275 when price is $85. With these new points and the original two points, estimate and interpret the best-fitting linear demand curve; do the same for the best-fitting constant elasticity demand curve.

Example 7.1