(a) Explanation Given information: A subway charges 65 cents per person and has 10 , 000 riders each day. The demand function for the subway is q = 2000 90 − p . Explanation: The demand function is f ( p ) = q = 2000 90 − p . Differentiate with respect to p , f ' ( p ) = ( 2000 ) − 1 2 90 − p . Therefore, f ' ( p ) = − 1000 90 − p . By using the formula of elasticity, E ( p ) = − p f ' ( p ) f ( p ) . = − p ( − 1000 / 90 − p ) 2000 90 − p = p 2 ( 90 x (b) To determine Whether the price of a ride is raised or lowered to increase the amount of money taken in by the subway for the demand function q = 2000 90 − p .

Calculus & Its Applications (14th Edition)

14th Edition

ISBN: 9780134437774

Author: Larry J. Goldstein, David C. Lay, David I. Schneider, Nakhle H. Asmar

Publisher: PEARSON

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Chapter 5.3, Problem 22E

(a)

To determine

Whether the demand function q=200090−p at p=65 is elastic or inelastic.

(b)

To determine

Whether the price of a ride is raised or lowered to increase the amount of money taken in by the subway for the demand function q=200090−p.

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Chapter 5.3, Problem 21E

Chapter 5.3, Problem 23E

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Whether the demand function q = 2000 90 − p at p = 65 is elastic or inelastic.

Solution Summary: The author analyzes whether the demand function q=2000sqrt90-p is elastic or inelastic.