The number of people taking city buses at price p dollars per ticket is given by D(p)=50006−p‾‾‾‾‾√
(a) Find the elasticity function: E(p)=___________
(b) Evaluate the elasticity at 2. E(2)= __________
(c) Currently, the price per ticket is 2 dollars. Should the price be raised in order to increase revenue?
(d) Use the elasticity of demand to find the price which maximizes revenue? p= ________________
we have
the elasticity of the demand is,
........................a)
put p = 2
.....................b)
here E < 1,
the demand is inelastic,
yes, the price be raised in order to increase revenue. ...............c)
now E = 1 for the maximum revenue,
....................d)
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