Question

Question #1) Find (a) the elasticity of demand and (b) the range of prices for which the demand is elastic (E , -1). f(p) = 200(30 - p)

Question #2) Suppose that at price p = 15 dollars the demand for a product is elastic. If the price is raised, what will happen to revenue?

Answer 1

@campbell_st can u help?

Answer 2

sorry... its not something I'm familar with... and I've just done a quick read on google... I'd need a fair bit of time to get my head around it. Sorry I can't help.

Answer 3

ok

Answer 4

@dpaInc can u help?

Answer 5

here is a bit of information I just found... it may help

http://www.mbs.edu/home/jgans/mecon/value/Popups/pop_up_examples_calculating_elasticity.htm

Answer 6

and here is another... http://www.extension.iastate.edu/agdm/wholefarm/pdf/c5-207.pdf

Answer 7

ok

Answer 8

so reading the information

if

f(p) = 200(30 - p)

and p = 10 f(10) = 4000 p = 20 f(20) = 2000

then the elasticity is

\[\frac{\frac{4000 -2000}{4000+2000}}{\frac{10 - 20}{10+20}} = \frac{\frac{1}{3}}{\frac{-1}{3}}\]

so it would appear to be - 1

thats a best guess...and 5 mins prep...

Answer 9

i'll look at the information more

Answer 10

ok so for question #2 i'll have to substitute 15 right?

Answer 11

can u help with the second q? @Mertsj

Answer 12

I would say you are right.

Answer 13

ok thx