In this problem, p is in dollars and q is the number of units.(a) Find the elasticity of the demand function p2 + 2p + q = 36 at p = 5.(b) How will a price increase affect total revenue?Since the demand is unitary, there will be no change in the revenue with a price increase.Since the demand is elastic, an increase in price will decrease the total revenue.Since the demand is inelastic, an increase in price will decrease the total revenue.Since the demand is elastic, an increase in price will increase the total revenue.Since the demand is inelastic, an increase in price will increase the total revenue.

We can find the elasticity by differentiating the given demand function and substituting in the…

Answered: (a) Find the elasticity of the demand…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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If the price of a good decreases from $6.50 to $5.75 and, as a result, the quantity demanded increases from 500 to 700. Using the midpoint method, the price elasticity of demand is
Given the table of elasticity estimates and price increases, calculate the percentage decrease in unit sales and then predict if total revenue should increase or decrease based on your calculations. Instructions: Enter your responses as a percentage rounded to one decimal place if necessary. Do not include a negative sign (-) with your answers. Degree of Elasticity Relatively elastic (E > 1) Airline travel, long run Unitary elastic (E = 1) Shoes Relatively inelastic (E< 1) Coffee v Estimate V 2.4 0.9 0.3 Decrease in Quantity Demanded Increase in Price (%) (%, do not include a negative sign) 20% 20% 20% Given the increase in price and your calculated percentage change in quantity demanded, what is the predicted impact on total revenue in each market? Airline Travel: total revenue will slightly decrease ✓ Shoes: total revenue will decrease Coffee: total revenue will decrease 21.6% 90.0% 81.0%
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Currently, 4900 people ride a certain commuter train each day and pay $9 for a ticket. The number of people q willing to ride the train at price p is q = 700 (10- p). The railroad would like to increase its revenue. (a) Is demand elastic or inelastic at p = 9? (b) Should the price of a ticket be raised or lowered? (a) Choose the elasticity of the demand below. inelastic elastic neither (b) What should the railroad do to increase revenue? The price should be lowered. The price should be raised.Currently, 4900 people ride a certain commuter train each day and pay $9 for a ticket. The number of people willing to ride the train at price p is q = 700 (10- p). The railroad would like to increase its revenue. (a) Is demand elastic or inelastic at p = 9 ? (b) Should the price of a ticket be raised or lowered? (a) Choose the elasticity of the demand below. inelastic elastic neither (b) What should the railroad do to increase revenue? The price should be lowered. The price should be raised.…
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