![onlymyworld27](/avatars/9680.jpg)
onlymyworld27
30.07.2020 •
Business
A bakery works out a demand function for its chocolate chip cookies and finds it to be q = D(x)= 760-13x, where q is the quantity of cookies sold when the price per cookie, in cents, is x.
Required:
a. Find the elasticity.
b. At what price is the elasticity of demand equal to 1?
c. At what prices is the elasticity of demand elastic?
d. At what prices is the elasticity of demand inelastic?
Solved
Show answers
More tips
- A Auto and Moto Mastering One-Movement Parking: All You Need to Know...
- P Photography and Videography Understanding HDR: How It Works and Why You Need It...
- P Photography and Videography How to Choose the Perfect Photo Paper for Your Images?...
- C Computers and Internet How to Choose an Uninterruptible Power Supply (UPS) for Your Computer: Expert Tips...
- S Science and Technology How to choose a home theater system?...
- A Auto and Moto How to Choose a Car Wash? Tips and Recommendations...
- A Animals and plants How ants survive winter: exploring the secrets of their winter life...
- C Construction and repair How to Choose the Best Underfloor Heating?...
- S Sport When is the Champions League final?...
- S Sport When and Where Will the 2014 World Cup be Held?...
Answers on questions: Business
- E English The word kafkaesque refers to something marked illogical terrifying and disorienting...
- M Mathematics An electrician charges a base fee of $65 plus $50 for each hour of work. The minimum the electrician charges is $165. Create a table that shows the amount the electrician charges...
- P Physics A wave has a wavelength of 14 m and a frequency of 24 Hz, what is the speed of the wave?...
- E English Which is the best strategy for responding to counter-arguments in your persuasive research essay? A. Ignore any evidence that does not support your own thesis. B.Use language...
Ответ:
Please refer to the below for explanation.
Explanation:
From the above, the demand function is given as ;
D(x)=760-13x
a) Find the elasticity
It means finding the derivative of the function
D'(X)=-13, hence elasticity is expressed as
xD'(x) / D'(x)
= x(-13) / 760 - 13x
= 13x / 760 - 13x
The elasticity expression is thus ; E(x)= 13x / 760 - 13x
b) At what price is the elasticity demand equal to 1.
The above means that E(X) = 1
Putting 1 for E(X) in the elasticity equation,
E(x) = 13x / 760 - 13x
1 = 13x / 760 - 13x
When you cross multiply, you'll have
760 - 13x = 13x
Collecting like terms, you'll have
760 = 13x + 13x
760 = 26x
Dividing both sides by 26, you'll have
x = 760 /26
x = 29.23
It means that the elasticity at the price of demand = 1 is 29.23
c) At what price is the elasticity of demand elastic.
The above means that E(X) > 1
Thus;
13x / 760 - 13x > 1
When you cross multiply, you'll have
13x > 760 - 13x
Collecting like terms, you'll have
13x + 13x > 760
26x > 760
Dividing both sides by 26, you'll have
x > 760/26
x > 29.23
It means that the elasticity of demand is elastic at x > 29.23
d) At what price is the elasticity of demand inelastic
The above means that E(X) < 1
Hence;
13x / 760 - 13x < 1
When you cross multiply, you'll have
13x < 760 - 13x
Collecting like terms, you'll have
13x + 13x < 76
26x < 760
Dividing both sides by 26, you'll have
x < 760/26
x < 29.23
It means that the elasticity of demand is inelastic at x < 29.23
Ответ: