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The short term demand for a product can be approximated by q = D(p) = 18...

The short term demand for a product can be approximated by q = D(p) = 18 − 2 √p where p represents the price of the product, in dollars per unit, and q is the number of units demanded. Determine the elasticity function. Use the elasticity of demand to determine if the current price of $50 should be raised or lowered to maximize total revenue.

Math   Calculus   
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Answer #1

we have

the elasticity of the demand is,

put p = 50,

here E > 1,

hence the demand is elastic, an decrease in price to maximize total revenue.

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