Shark Inc. has determined that demand for its newest netbook model is given by lnq−3lnp+0.005p=7, where q is the number of netbooks Shark can sell at a price of p dollars per unit. Shark has determined that this model is valid for prices p≥100. You may ﬁnd it useful in this problem to know that elasticity of demand is deﬁned to be E(p)=dq/dp (p/q)

a)Find E(p)
Your answer should only be in terms of p

b)What price will maximize revenue.

Question

Shark Inc. has determined that demand for its newest netbook model is given by lnq−3lnp+0.005p=7, where q is the number of netbooks Shark can sell at a price of p dollars per unit. Shark has determined that this model is valid for prices p≥100. You may ﬁnd it useful in this problem to know that elasticity of demand is deﬁned to be E(p)=dq/dp (p/q)

a)Find E(p)
Your answer should only be in terms of p

b)What price will maximize revenue.

anonymous · Answer

It's actually lnq-3lnp+0.005p=7

e.mccormick · Answer

Are you looking for the derivative method?

anonymous · Answer

I tried getting q'(p/q) and I got 3-0.005p but that was wrong

anonymous · Answer

my q'=((3/p)-0.005)q

e.mccormick · Answer

Hmmm... well, did you do implicit differentiation because you have both variables in there?

anonymous · Answer

yup

anonymous · Answer

I don't know what I'm doing wrong

primeralph · Answer

Elasticity of demand is just dq/dp. Where is the other p/q factor from?

anonymous · Answer

I'm having so much trouble finding elasticity though.. I keep gettng 3-0.005p

primeralph · Answer

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