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Keep in mind the formula for elasticity of demand used in this course is E =- dp. Hint: Start off by solving for q in terms of p using a natural logarithm. Once you have an expression for q you can differentiate it with respect to p to get dq/dp. Plug your dq/dp into the formula for E, replace all the p's with 600e 0.29 and you've got your elasticity (it should simplify down nicely). You can maximize revenue by finding the quantity that gives you unit elasticity, i.e., E = 1. For the following demand function, find a. E, and b. the values of q (if any) at which total revenue is maximized. p= 600 e -0.2q a. Find the elasticity of demand (E) in terms of q. E(q) = b. Find the values of q (if any) at which total revenue maximized. Select the correct choice below, and if necessary, fill in the answer box within your choice. O A. Revenue is maximized at q= (Type an integer or a simplified fraction.) O B. No values of q maximize revenue.

Keep in mind the formula for elasticity of demand used in this course is E =- dp. Hint: Start off by solving for q in terms of p using a natural logarithm. Once you have an expression for q you can differentiate it with respect to p to get dq/dp. Plug your dq/dp into the formula for E, replace all the p's with 600e 0.29 and you've got your elasticity (it should simplify down nicely). You can maximize revenue by finding the quantity that gives you unit elasticity, i.e., E = 1. For the following demand function, find a. E, and b. the values of q (if any) at which total revenue is maximized. p= 600 e -0.2q a. Find the elasticity of demand (E) in terms of q. E(q) = b. Find the values of q (if any) at which total revenue maximized. Select the correct choice below, and if necessary, fill in the answer box within your choice. O A. Revenue is maximized at q= (Type an integer or a simplified fraction.) O B. No values of q maximize revenue.

Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter6: Simple Pricing
Section: Chapter Questions
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Keep in mind the formula for elasticity of demand used in this course is E =- dp. Hint: Start off by solving for q in terms of p using a natural logarithm. Once you have an expression for q you can differentiate it with respect to p to get dq/dp. Plug your dq/dp into the formula for E, replace all the p's with 600e 0.29 and you've got your elasticity (it should simplify down nicely). You can maximize revenue by finding the quantity that gives you unit elasticity, i.e., E = 1. For the following demand function, find a. E, and b. the values of q (if any) at which total revenue is maximized. p= 600 e -0.2q a. Find the elasticity of demand (E) in terms of q. E(q) = b. Find the values of q (if any) at which total revenue maximized. Select the correct choice below, and if necessary, fill in the answer box within your choice. O A. Revenue is maximized at q= (Type an integer or a simplified fraction.) O B. No values of q maximize revenue.
Transcribed Image Text:Keep in mind the formula for elasticity of demand used in this course is E =- dp. Hint: Start off by solving for q in terms of p using a natural logarithm. Once you have an expression for q you can differentiate it with respect to p to get dq/dp. Plug your dq/dp into the formula for E, replace all the p's with 600e 0.29 and you've got your elasticity (it should simplify down nicely). You can maximize revenue by finding the quantity that gives you unit elasticity, i.e., E = 1. For the following demand function, find a. E, and b. the values of q (if any) at which total revenue is maximized. p= 600 e -0.2q a. Find the elasticity of demand (E) in terms of q. E(q) = b. Find the values of q (if any) at which total revenue maximized. Select the correct choice below, and if necessary, fill in the answer box within your choice. O A. Revenue is maximized at q= (Type an integer or a simplified fraction.) O B. No values of q maximize revenue.
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