In one of the years the actual selling price was $385 per phone. What was the corresponding price elasticity of demand? (Round your answer to two decimal places.) E = Interpret your answer. The demand was going down vv by about % per 1% increase in price at that price level. Use your formula for E to determine the selling price that would have resulted in the largest annual revenue. $ 302 What would have been the resulting annual revenue? (Round your answer to two decimal places.) billion
In one of the years the actual selling price was $385 per phone. What was the corresponding price elasticity of demand? (Round your answer to two decimal places.) E = Interpret your answer. The demand was going down vv by about % per 1% increase in price at that price level. Use your formula for E to determine the selling price that would have resulted in the largest annual revenue. $ 302 What would have been the resulting annual revenue? (Round your answer to two decimal places.) billion
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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B and C
Transcribed Image Text:Worldwide annual sales of smartphones over a two year period were approximately q = -4p + 3,040 million phones at a selling price of $p per phone.
(a) Obtain a formula for the price elasticity of demand E.
4p
3040 – 4p
E =
(b) In one of the years the actual selling price was $385 per phone. What was the corresponding price elasticity of demand? (Round your answer to two decimal places.)
E =
Interpret your answer.
The demand was going down
by about
% per 1% increase in price at that price level.
(c) Use your formula for E to determine the selling price that would have resulted in the largest annual revenue.
$ 302
What would have been the resulting annual revenue? (Round your answer to two decimal places.)
$
billion
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