The estimated monthly sales of Mona Lisa paint-by-number sets is given by the formula q = 95ep − 3p2⁄2, where q is the demand in monthly sales and p is the retail price in hundreds of yen. (a)Determine the price elasticity of demand E when the retail price is set at ¥300. E = Interpret your answer. The demand is going
The estimated monthly sales of Mona Lisa paint-by-number sets is given by the formula q = 95ep − 3p2⁄2, where q is the demand in monthly sales and p is the retail price in hundreds of yen. (a)Determine the price elasticity of demand E when the retail price is set at ¥300. E = Interpret your answer. The demand is going
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 9CQ
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Question
The estimated monthly sales of Mona Lisa paint-by-number sets is given by the formula
q = 95ep − 3p2⁄2,
where q is the demand in monthly sales and p is the retail price in hundreds of yen.(a)Determine the price elasticity of demand E when the retail price is set at ¥300.
E =
Interpret your answer.
The demand is going by % per 1% increase in price at that price level. Thus, a large price ___ is advised.
(b)At what price will revenue be a maximum? (Round your answer to the nearest integer.)
yen
(c)Approximately how many paint-by-number sets will be sold per month at the price in part (b)? (Round your answer to the nearest integer.)
paint-by-number sets per month
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