Parts D to F neded only, thank you. The quantity q demanded each week for a new
ID: 2887312 • Letter: P
Question
Parts D to F neded only, thank you.
The quantity q demanded each week for a new digital camera is related to the price p of the camera (in dollars) by the function q-V400-5p hundred cameras. a. Find the elasticity of demand function E. c. For what price is there unit elasticity? f. In part d, will the revenue increase or decrease? Explain why Find E for p = $40 and p-$60. In each case, state whether the demand is elastic or inelastic. reased by 1%, how will the demand change? At the price of $60, if the price is decreased by 4%, how will the demand change? g. In part e, will the revenue increase or decrease? Explain why.Explanation / Answer
D) here..q= sqrt(400-5p)..when p = 40..q becomes 20...and when p=40.4(1% increased value from 40 )...the new q..i.e..q' = 3?22 ~ 14.07..therefore...q/q' = 20/14.07 or q' = 14. 07×q/20.
F) After increment of 1%..clearly q' decreases..therefore..revenue also decreases.