Question

A bakery works out a demand function for its chocolate chip cookies and finds it to be

q equals Upper D left parenthesis x right parenthesis equals 705 minus 10 xq=D(x)=705−10x​,

where

qq

is the quantity of cookies sold when the price per​ cookie, in​ cents, is

xx.

Use this information to answer parts ​a) through

​f).

​a) Find the elasticity.

​E(x)equals=nothing

​b) At what price is the elasticity of demand equal to​ 1?   

nothingcents¢

​(Round to the nearest cent as​ needed.)

​c) At what prices is the elasticity of demand​ elastic?

A.

Prices cannot be elastic in this case

B.Less than

3535cents¢

C.Greater than

3535cents¢

D.

Prices are elastic at all values.

​d) At what prices is the elasticity of demand​ inelastic?

A.Less than

3535cents¢

B.

Prices cannot be inelastic in this case

C.

Prices are inelastic at all values

D.Greater than

3535cents¢

​e) At what price is the revenue a​ maximum?

xequals=nothingcents¢

​(Round to the nearest cent as needed. Use a comma to separate answers as​ needed.)

​f) At a price of

1818​¢

per​ cookie, will a small increase in price cause the total revenue to increase or​ decrease?

IncreaseIncrease

Answer 1