- #1
rain
- 11
- 0
I have some question on elasticity.
If the demand function is q=Cp^(-k), where C and k are positive constants.
a)Find E.
b)if 0<k<1, what does your answer from part a say about how prices should be set to maximize the revenue?
c)if k>1, what does your answer from part a say about how prices should be set to maximize the revenue?
d)if k=1, what does your answer from part a tell you about setting prices to maximize revenue?
e)is this demand function realistic?
part a) my answer is E=k
How do you use part a in answering parts b,c,d,e?
If the demand function is q=Cp^(-k), where C and k are positive constants.
a)Find E.
b)if 0<k<1, what does your answer from part a say about how prices should be set to maximize the revenue?
c)if k>1, what does your answer from part a say about how prices should be set to maximize the revenue?
d)if k=1, what does your answer from part a tell you about setting prices to maximize revenue?
e)is this demand function realistic?
part a) my answer is E=k
How do you use part a in answering parts b,c,d,e?