5. Consider the demand function given by 3q + 4p = 10, where p denotes the unit price for a certain product and q the amount sold. a. Find the function that gives the revenue r in terms of the quantity q. b. What is the average rate of change of revenue with respect to quantity when q = 0.75 and Aq=0.1? c. Suppose that the calculation in b. is made with Aq equal to 0.01, 0.001, 0.0001, ... What is the limit value of this calculation called? (Give the mathematical name as well as the economic name.) d. What is the notation used for this limit value? e. Calculate the limit value. f. Find the point elasticity of demand for p = 1 and determine whether demand is (perfectly) inelastic, is (perfectly) elastic or has unit elasticity. g. Use your answer to question f. to approximate the change in demand when the price of 1 is increased by 0.25%. h. What can you derive from your answer to question f. about the change in revenue when the price is slightly increased starting from p=1? i. Find the price level at which the demand has unit elasticity.
5. Consider the demand function given by 3q + 4p = 10, where p denotes the unit price for a certain product and q the amount sold. a. Find the function that gives the revenue r in terms of the quantity q. b. What is the average rate of change of revenue with respect to quantity when q = 0.75 and Aq=0.1? c. Suppose that the calculation in b. is made with Aq equal to 0.01, 0.001, 0.0001, ... What is the limit value of this calculation called? (Give the mathematical name as well as the economic name.) d. What is the notation used for this limit value? e. Calculate the limit value. f. Find the point elasticity of demand for p = 1 and determine whether demand is (perfectly) inelastic, is (perfectly) elastic or has unit elasticity. g. Use your answer to question f. to approximate the change in demand when the price of 1 is increased by 0.25%. h. What can you derive from your answer to question f. about the change in revenue when the price is slightly increased starting from p=1? i. Find the price level at which the demand has unit elasticity.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:5. Consider the demand function given by 3q + 4p = 10, where p denotes the unit price for a certain
product and q the amount sold.
a. Find the function that gives the revenue r in terms of the quantity q.
b. What is the average rate of change of revenue with respect to quantity when q = 0.75 and
Aq=0.1?
c. Suppose that the calculation in b. is made with Aq equal to 0.01, 0.001, 0.0001, ... What is
the limit value of this calculation called? (Give the mathematical name as well as the economic
name.)
d. What is the notation used for this limit value?
e. Calculate the limit value.
f. Find the point elasticity of demand for p = 1 and determine whether demand is (perfectly)
inelastic, is (perfectly) elastic or has unit elasticity.
g. Use your answer to question f. to approximate the change in demand when the price of 1 is
increased by 0.25%.
h. What can you derive from your answer to question f. about the change in revenue when the price
is slightly increased starting from p=1?
i. Find the price level at which the demand has unit elasticity.
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can u solve point d to i
d. What is the notation used for this limit value?
e. Calculate the limit value.
f. Find the point elasticity of demand for p = 1 and determine whether demand is (perfectly) inelastic, is (perfectly) elastic or has unit elasticity.
g. Use your answer to question f. to approximate the change in demand when the price of 1 is increased by 0.25%.
h. What can you derive from your answer to question f. about the change in revenue when the price is slightly increased starting from p=1?
i. Find the price level at which the demand has unit elasticity.
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