A garden shop determines the demand function q = D(x) = 4x + 500 during early summer for tomato plants where q is 10x +9 the number of plants sold per day when the price is x dollars per plant. (a) Find the elasticity. (b) Find the elasticity when x = 3. (c) At $3 per plant, will a small increase in price cause the total revenue to increase or decrease?

A garden shop determines the demand function q = D(x) = 4x + 500 during early summer for tomato plants where q is 10x +9 the number of plants sold per day when the price is x dollars per plant. (a) Find the elasticity. (b) Find the elasticity when x = 3. (c) At $3 per plant, will a small increase in price cause the total revenue to increase or decrease?

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter6: Simple Pricing

Section: Chapter Questions

Problem 6.1IP

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Question

4x + 500
10x +9
the number of plants sold per day when the price is x dollars per plant.
A garden shop determines the demand function q = D(x) =
(a) Find the elasticity.
(b) Find the elasticity when x=3.
(c) At $3 per plant, will a small increase in price cause the total revenue to increase or decrease?
(a) The elasticity is
during early summer for tomato plants where q is
M
Ir

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Step 1: Define Elasticity

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Step 2: Find the elasticity

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Step 3: Find the elasticity when x = 3

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Step 4: Interpret the change in TR when P increases

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