10:05 PM @ 100%). + ezto.mheducation.com My Academics CalCentral McGraw-Hill Con

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10:05 PM @ 100%). + ezto.mheducation.com My Academics CalCentral McGraw-Hill Connect Connect | Section Home Homework 1 Econ 10OA: TTH 5:00pm Spring 2018 Konstantin ECONOMIcS Homework 1 instructions help | Question 7 (of 12) Save & Exit Submit alue: 25.00 points Suppose that the U.S. demand for maple syrup, in thousands of gallons per year, is QE = 7700-55P, where P is the price per gallon. At what price is the expenditure on maple syrup by U.S. consumers highest? Instructions: Round your answer to 2 decimal places. eBook & Resources

Explanation / Answer

Total expenditure is maximum when price elasticity of demand is equal to 1.

E = dq/dp * p/q

Dq/dp = -55

Put values in the formula

1 = -55p / 7700-55p

-55p = 7700-55p

P = 7700/ 110

P = 70

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