The estimated monthly sales of Mona Lisa paint-by-number sets is given by the formula q = 95e−3p2 + p, where q is the demand in monthly sales and p is the retail price in hundreds of yen. (a) Determine the price elasticity of demand E when the retail price is set at ¥400. E = _____ Interpret your answer. The demand is going down/up by ____ % per 1% increase in price at that price level. Thus, a large price decrease/increase is advised. (b) At what price will revenue be a maximum? ____ hundred yen (c) Approximately how many paint-by-number sets will be sold per month at the price in part (b)? (Round your answer to the nearest integer.) ______ paint-by-number sets per month
The estimated monthly sales of Mona Lisa paint-by-number sets is given by the formula q = 95e−3p2 + p, where q is the demand in monthly sales and p is the retail price in hundreds of yen. (a) Determine the price elasticity of demand E when the retail price is set at ¥400. E = _____ Interpret your answer. The demand is going down/up by ____ % per 1% increase in price at that price level. Thus, a large price decrease/increase is advised. (b) At what price will revenue be a maximum? ____ hundred yen (c) Approximately how many paint-by-number sets will be sold per month at the price in part (b)? (Round your answer to the nearest integer.) ______ paint-by-number sets per month
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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The estimated monthly sales of Mona Lisa paint-by-number sets is given by the formula
demand in monthly sales and p is the retail price in hundreds of yen.
q = 95e−3p2 + p,
where q is the (a)
Determine the price elasticity of demand E when the retail price is set at ¥400.
E = _____
Interpret your answer.
The demand is going down/up by ____ % per 1% increase in price at that price level. Thus, a large price decrease/increase is advised.
(b)
At what price will revenue be a maximum?
____ hundred yen
(c)
Approximately how many paint-by-number sets will be sold per month at the price in part (b)? (Round your answer to the nearest integer.)
______ paint-by-number sets per month
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