1. -0.5 points LarApCalc10 3.5.028. 05 Submissions Used My Notes Ask Your Consid

Question

1. -0.5 points LarApCalc10 3.5.028. 05 Submissions Used My Notes Ask Your Consider the following Demand Function 400-3x Quantity Demanded Find the price elasticity of demand for the demand function at the indicated x-value. 167 Is the demand elastic, inelastic, or of unit elasticity at the indicated x-value? The demand is elastic at this x-value The demand is inelastic at this x-value. The demand is of unit elasticity at this x-value. Use a graphing utility to graph the revenue function. 500 400 WebAssign Plot D 200 100 15 000 10 000 5000 20 40 60 80 100 120 20 40 60 80 100 120

Explanation / Answer

The value given shows elasticity greater than 1 and so demand is elastic. The change in demand is greater than the change in price.

In all cases if demand is elastic then an increase in price will reduce total revenue and a reduction in price will increase total revenue. If demand is inelastic, an increase in price will increase total revenue and a reduction in price with inelastic demand will reduce total revenue.

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