The estimated monthly sales of Mona Lisa paint-by-number sets is given by the fo

Question

The estimated monthly sales of Mona Lisa paint-by-number sets is given by the formula q = 99e^0 - 3 rho^2/2, where q is the demand In monthly sales and rho is the let all price in yen. (a) Determine the price elasticity of demand E when the retail price is set at 2 yen. E = _ Interpret your answer The demand Is going by_ % per 1% Increase In price at that price level. Thus, a large price is advised. (b) At what price will revenue be a minimum? () (c) Approximately how many paint-by-number sets will the sold per month at the price in part (b)? (Round your answer to the nearest Integer.) paint-by-number sets per month.

Explanation / Answer

given q=99ep-(3/2)p^2

dq/dp =99ep-(3/2)p^2(1-3p)

a)price elasticity of demand,E =(dq/dp)*(p/q)

E =(99ep-(3/2)p^2(1-3p))*(p/99ep-(3/2)p^2)

E =(1-3p)p

p=2 yen

E =(1-3*2)2

E=-10

the demand is going down by 10 percent per 1% increase in price at that price level,thus large price decrease is advised

b) revenue is maximum when E =-1

(1-3p)p=-1

3p2-p-1=0

p=(1+((-1)2-(4*3*-1)))/(2*3)

p=0.77 yen

c)

q=99ep-(3/2)p^2,p=0.77

q=99e0.77-(3/2)0.77^2

q=88

88 paint-by-number sets per month

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.