Answered: 1. The demand for an insulated…

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Economics

1. The demand for an insulated stainless steel bottle is modeled by the function f(p) = = V625 – 0.3p2 0

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

1. The demand for an insulated stainless steel bottle is modeled by the function
f(p) = V625 – 0.3p2
0 <p< 40
where f(p) is the quantity in thousands of bottles produced weekly and p is the price,
in dollars, of each bottle.
(a) Write out f'(p) by doing the following:
• Rewrite f(p) in power form.
• Demonstrate the general power rule.
(b) Write out the function E(p).
(c) Find E(34). Is the price of $34 inelastic, elastic, or does it have unit elasticity?
(d) If the company is charging $34 for a stainless steel bottle, should they raise the
price or lower the price in order to increase their revenue? Give a reason for your
choice.

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