- The current toll for the use of a certain toll road is $50. A
study conducted by
the state highway department
determined that with a toll of p dollars, q cars
will
use the road each day, where q =
60,000e^-0.5p
- Find an expression for the Elasticity of Demand, E(p) [4]
- Is the demand Elastic or Inelastic at the current toll
price? [2]
- If the state increases the toll slightly, will the revenue
increase of
decrease? [1]
- Should they consider raising the toll to any more than $2? Why
or why not?
[3]