Question

A bakery works out a demand function for its chocolate chip cookies and finds it to be

q equals Upper D left parenthesis x right parenthesis equals 567 minus 22 xq=D(x)=567−22x​,

where

qq

is the quantity of cookies sold when the price per​cookie, in​ cents, is

xx.

Use this information to answer parts ​a) through

​f).

A bakery works out a demand function for its chocolate chip cookies and finds it to be q=Dx) = 567-22x, where is the quantity of cookies sold when the price per cookie, in cents, is x. Use this information to answer parts a) through f). a) Find the elasticity. E(x)= b) At what price is the elasticity of demand equal to 1? (Round to the nearest cent as needed.) c) At what prices is the elasticity of demand elastic? O A. Less than 13€ O B. Prices cannot be elastic in this case OC. Prices are elastic at all values. OD Greater than 13 d) At what prices is the elasticity of demand inelastic? O A. Prices are inelastic at all values OB. Prices cannot be inelastic in this case O C. Less than 134 OD. Greater than 134 --- -

Answer 1

Solution: step to Caiven DCx) = 567-220 (a)e - 22 Elale-n o'ca) Din) I – X (-22) 567-221 561-22 987.2.22 Therefore, the expression of elasticity is: ER) E 2222 567-2ax (6) Elnil 2) 220 al 567- 220 22xc 567-22x aux = 567 xe 567/44 an 12.88 636 ou au 13 Hence, the elasticity is I at the price $ 12.80 O 13 1 Enll> =1 324 24 11 44 x 7 567 x>12.89 Glence, the elasticity of when honor 7x in elastic demand x> 13

(d) TENICI a as 1289 Hence, the elasticity of demand is enelastic at ac13 e Total Revenue R(x) in D(x) RIO). 5676-2222 For maximum revenue R (n) co R'lali 567 - wun. if Realco, then 561-44820 Exc 12.89 or 13 R(12.89) ~ 3653.2838 thers, the small increase in price cause the total revenue decrease. O honor 7x