3 A linear demand for lake front cabins on a nearby lake is estimated to be: Qp=900,000 - 2P. What is the point price elasticity for lake front cabins at a price of P $300,000? [HINT:E,=(&Q/@P)(P/Q] a Ep=-3.0 b. Е 3-2.0 C. Ep=-1.0 d. Ep=-0.5 e. Ep 0

3 A linear demand for lake front cabins on a nearby lake is estimated to be: Qp=900,000 - 2P. What is the point price elasticity for lake front cabins at a price of P $300,000? [HINT:E,=(&Q/@P)(P/Q] a Ep=-3.0 b. Е 3-2.0 C. Ep=-1.0 d. Ep=-0.5 e. Ep 0

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter6: Simple Pricing

Section: Chapter Questions

Problem 10MC

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Question

A linear demand for lake front cabins on a nearby lake is estimated to be: Qp=900,000 - 2P. What is
the point price elasticity for lake front cabins at a price of P $300,000? [HINT: E,=(@Q/0P)(P/Q)]
Ep = -3.0
b. Ep = -2.0
C. Ep=-1.0
d. Ep =-0.5
Ep = 0
a.
e.

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