68The demand equation for a product is q =+ In (126 - p)(a) Determine the point elasticity of demand when p = 5 and classify the demand as elastic, inelastic, or of unit elasticity at this price level.(b) If the price is lowered by 2% (from $5.00 to $4.90), use the answer to part (a) to estimate the corresponding percentage change in quantity sold.(c) Will the changes in part (b) result in an increase or decrease in revenue? Explain.(a) The point elasticity of demand is(Round to two decimal places as needed.)when p = 5.Since Inl1, demand is(b) The percentage change in quantity sold is %(Round to two decimal places as needed.)(c) Will the changes in part (b) result in an increase or decrease in revenue? Choose the correct answer below.A. Lowering the price does not affect revenue.B. Lowering the price increases revenue because demand is elastic.C. Lowering the price decreases revenue because demand is inelastic.D. Lowering the price decreases revenue because demand is elastic.

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68 The demand equation for a product is q = + In (126 - p). (a) Determine the point elasticity of demand when p= 5 and classify the demand as elastic, inelastic, or of unit elasticity at this price level. (b) If the price is lowered by 2% (from $5.00 to $4.90), use the answer to part (a) to estimate the corresponding percentage change in quantity sold (c) Will the changes in part (b) result in an increase or decrease in revenue? Explain. (a) The point elasticity of demand is when p = 5. (Round to two decimal places as needed.) Since Inl 1, demand is (b) The percentage change in quantity sold is %. (Round to two decimal places as needed.) (c) Will the changes in part (b) result in an increase or decrease in revenue? Choose the correct answer below O A. Lowering the price does not affect revenue B. Lowering the price increases revenue because demand is elastic O C. Lowering the price decreases revenue because demand is inelastic. D. Lowering the price decreases revenue because demand is elastic.

68 The demand equation for a product is q = + In (126 - p). (a) Determine the point elasticity of demand when p= 5 and classify the demand as elastic, inelastic, or of unit elasticity at this price level. (b) If the price is lowered by 2% (from $5.00 to $4.90), use the answer to part (a) to estimate the corresponding percentage change in quantity sold (c) Will the changes in part (b) result in an increase or decrease in revenue? Explain. (a) The point elasticity of demand is when p = 5. (Round to two decimal places as needed.) Since Inl 1, demand is (b) The percentage change in quantity sold is %. (Round to two decimal places as needed.) (c) Will the changes in part (b) result in an increase or decrease in revenue? Choose the correct answer below O A. Lowering the price does not affect revenue B. Lowering the price increases revenue because demand is elastic O C. Lowering the price decreases revenue because demand is inelastic. D. Lowering the price decreases revenue because demand is elastic.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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