A garden shop determines the demand function q = = D(p) = 4p+1000 %3D during early summer for 40p+26 omato plants where q is the number of plants sold per day when the price is p dollars per plant. a. Find the price elasticity of demand equation. b. Calculate the price elasticity of demand at a price of $3. Is the demand elastic, inelastic, or unit elastic? How do you know? C. Based on the information in part b, should the garden shop increase, decrease, or leave the price the same at $3 if it wants to increase revenue? Explain. d. Calculate the revenue before the price change and after to support your answer to part c.
A garden shop determines the demand function q = = D(p) = 4p+1000 %3D during early summer for 40p+26 omato plants where q is the number of plants sold per day when the price is p dollars per plant. a. Find the price elasticity of demand equation. b. Calculate the price elasticity of demand at a price of $3. Is the demand elastic, inelastic, or unit elastic? How do you know? C. Based on the information in part b, should the garden shop increase, decrease, or leave the price the same at $3 if it wants to increase revenue? Explain. d. Calculate the revenue before the price change and after to support your answer to part c.
Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter7: Consumer Choice And Elasticity
Section: Chapter Questions
Problem 13CQ: Suppose Erin, the owner-manager of a local hotel projects the following demand for her rooms: a....
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