ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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A bakery works out a demand function for its chocolate chip cookies and finds it to be q = D(x) = 906-13x, where q 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.
O B.
O C. Less than 35¢
O D. Prices are elastic at all values.
Greater than 35¢
Prices cannot be elastic in this case
d) At what prices is the elasticity of demand inelastic?
OA. Greater than 35¢
OB. Less than 35¢
OC. Prices cannot be inelastic in this case
O D. Prices are inelastic at all values
e) At what price is the revenue a maximum?
x=¢
(Round to the nearest cent as needed. Use a comma to separate answers as needed.)
f) At a price of 17¢ per cookie, will a small increase in price cause the total revenue to increase or decrease?
O
O
Decrease
Increase
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Transcribed Image Text:A bakery works out a demand function for its chocolate chip cookies and finds it to be q = D(x) = 906-13x, where q 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. O B. O C. Less than 35¢ O D. Prices are elastic at all values. Greater than 35¢ Prices cannot be elastic in this case d) At what prices is the elasticity of demand inelastic? OA. Greater than 35¢ OB. Less than 35¢ OC. Prices cannot be inelastic in this case O D. Prices are inelastic at all values e) At what price is the revenue a maximum? x=¢ (Round to the nearest cent as needed. Use a comma to separate answers as needed.) f) At a price of 17¢ per cookie, will a small increase in price cause the total revenue to increase or decrease? O O Decrease Increase
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