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A general hyperbolic demand function has the form q : (r and k nonzero constants). (a) Obtain a formula for the price elasticity E of demand at unit price p. E =

A general hyperbolic demand function has the form q : (r and k nonzero constants). (a) Obtain a formula for the price elasticity E of demand at unit price p. E =

Calculus: Early Transcendentals
Calculus: Early Transcendentals
8th Edition
ISBN:9781285741550
Author:James Stewart
Publisher:James Stewart
Chapter1: Functions And Models
Section: Chapter Questions
Problem 1RCC: (a) What is a function? What are its domain and range? (b) What is the graph of a function? (c) How...
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A general hyperbolic demand function has the form q = k (r and k nonzero constants). (a) Obtain a formula for the price elasticity E of demand at unit price p. E = (b) How does E vary with p? O E increases as p increases. O E decreases as p increases. O E is independent of p. (c) What does the answer to part (b) say about the model? If r = 1, the revenue is not affected by the price v If r> 1, the revenue is always elastic , whereas if r< 1, the revenue is always inelastic
Transcribed Image Text:A general hyperbolic demand function has the form q = k (r and k nonzero constants). (a) Obtain a formula for the price elasticity E of demand at unit price p. E = (b) How does E vary with p? O E increases as p increases. O E decreases as p increases. O E is independent of p. (c) What does the answer to part (b) say about the model? If r = 1, the revenue is not affected by the price v If r> 1, the revenue is always elastic , whereas if r< 1, the revenue is always inelastic
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