2 points Saved Question 1 The demand of a certain soda is given by D(p) =-p, 64

Question

2 points Saved Question 1 The demand of a certain soda is given by D(p) =-p, 64 thousand bottles, where the m arket price of the soda is p dollars per bottle a. What is the maximum possible market price Pmax ? Answer: Pmax 4 infinity".) b. What is the consumer expenditure when the market price is $3 per bottle? Answer: 37 c.What is the consumer surplus when the market price is $3 per bottle? Answer: 3.94 d. What is the consumer willingness and ability to spend when the market price is $3 per bottle? Answer: 466364.16 dollars per bottle (If there is no such price, write dollars dollars

Explanation / Answer

a. D(p)=64-p^3 = 4^3-p^3 = (4-p)(16+4p+p^2)

p_max = when D tend to 0

=> p_max = (4-p)(16+4p+p^2) =0

=> p_max = 4

b. Consumer expenditure when market price is $3 per bottle = D(3)=64-27 = 37

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