The Physics Club sells E = mc² T-shirts at the local flea market. Unfortunately, the club's previous administration has been losing money for years, so you decide to do an analysis of the sales. A quadratic regression based on old sales data reveals the following demand equation for the T-shirts. q = -2p2 + 30p (9 sps 15) Here, p is the price the club charges per T-shirt, and q is the number it can sell each day at the flea market. (a) Obtain a formula for the price elasticity of demand for E = mc² T-shirts. E = (b) Compute the elasticity of demand if the price is set at $9 per shirt. (Round your answer to two decimal places.) Interpret the result. The demand for E = mc T-shirts is going ? e by about % per 1% increase in the price. (c) How much should the Physics Club charge for the T-shirts to obtain the maximum daily revenue? $ What will the revenue be?
The Physics Club sells E = mc² T-shirts at the local flea market. Unfortunately, the club's previous administration has been losing money for years, so you decide to do an analysis of the sales. A quadratic regression based on old sales data reveals the following demand equation for the T-shirts. q = -2p2 + 30p (9 sps 15) Here, p is the price the club charges per T-shirt, and q is the number it can sell each day at the flea market. (a) Obtain a formula for the price elasticity of demand for E = mc² T-shirts. E = (b) Compute the elasticity of demand if the price is set at $9 per shirt. (Round your answer to two decimal places.) Interpret the result. The demand for E = mc T-shirts is going ? e by about % per 1% increase in the price. (c) How much should the Physics Club charge for the T-shirts to obtain the maximum daily revenue? $ What will the revenue be?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:The Physics Club sells E
analysis of the sales. A quadratic regression based on old sales data reveals the following demand equation for the T-shirts.
mc- T-shirts at the local flea market. Unfortunately, the club's previous administration has been losing money for years, so you decide to do an
%D
q = -2p2 + 30p
(9 <p< 15)
%D
Here, p is the price the club charges per T-shirt, and q is the number it can sell each day at the flea market.
(a) Obtain a formula for the price elasticity of demand for E =
mc? T-shirts.
E =
(b) Compute the elasticity of demand if the price is set at $9 per shirt. (Round your answer to two decimal places.)
Interpret the result.
The demand for E =
mc2 T-shirts is going ?
O by about
% per 1% increase in the price.
(c) How much should the Physics Club charge for the T-shirts to obtain the maximum daily revenue?
$
What will the revenue be?
$
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