1/3 points | Previous Answers SApCalcBr1 4.7.019. 1/8 Submissions Used My Notes

Question

1/3 points | Previous Answers SApCalcBr1 4.7.019. 1/8 Submissions Used My Notes Ask Your Teacher The demand function for a particular pair of sunglasses is ?-165-00759. (a fthe sunglasses are priced at $65, how many pairs can be sold? (Round your answer to the nearest integer.) x pairs (b) Compute the elasticity of demand when the sunglasses are priced at $65. (Round your answer to two decimal places.) At this price, is the demand elastic or inelastic? O The demand is elastic. The demand is inelastic. Talk to a Tutor

Explanation / Answer

The demand function is

p = 165 - 0.075q.

(a) p = 65

=> 65 = 165 - 0.075q

=> 0.075q = 165 - 65

=> 0.075q = 100

=> q = 100/0.075

=> q = 1333.33

The nearest integer is 1333.

(b) Elasticity

= dq/dp * p/q

We have

p = 165 - 0.075q

=> q = 1/0.075 (165 - p)

Differentating the function

=> dq/dp = -1/0.075

=> Elasticity at p = 65, q = 1333.33....

= -1/0.075 * 65/1333.33

= -0.65.

The demand is inelastic since -1 < -0.65 < 0.

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