D Pearson Education x- a Amazon.com: Psycr ×??Calendar × \\ e Calculus question
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D Pearson Education x- a Amazon.com: Psycr ×??Calendar × e Calculus question l( × yw M1 48-Section 12.6 x Y! NXNWI Lease Instr × ' N Netflix > c secure ! https://www.webassign.net/web/Student/Assignment-Responses/submit?dep-18513689#01 Korea selfie drink Really Simple Vanilla Winx Talk to Tuter Need Help? 5.7114.28 points I Previous Antswers WaneFMAC6 12.6.007 My A study or about 1,800 U.S. Colleges and universities resulted in the demand equation q-10. 100 2p, where q is the enrollment at a college or university, and ? is the average annual tuition (plus fees) it charges. a) The study also found that the average tuition charged by universities and colleges was $2,900. what is the corresponding price elasticity of demand? (Round your answers to two decimal places.) Is the price elastic or inelastic? elasic inelastic Should colleges charge more or less on average to maximize revenue? o more less (b) Based on the study, what would you advise a college to charge its students in order to maximize total revenue? per student What would the revenue bc? Need Help? Talk to s Tuter 4.76/14 28 points 1 Pvious Answers WaneFMACO 12.0.002 My N The estimated monthly sales of Mona Lisa paint-by-number sets is given by the formula q- 101e-p+P, where q is the demand in monthly sales and p is the retail price in hundreds of yen. (a) Determine the price elasticity of demand E when the retail price is set at 300. Interpret your answer The demand is going downby % per 1% increase in price at that price level. Thus, a large price decrease is advised.Explanation / Answer
4.
If p = 2900, corresponding q = 10100-2x2900 = 4300
Also, dq/dp = -2
Now we know elasticity of demand = (dq/dp) x (p/q)
Putting values,
elasticity = -2 x 2900/4300 = -1.35
(b) Total revenue (say r)= p x q = p x (10100 - 2p) = 10100p - 2p^2
to maximize it, dr/dp = 0
which gives, 10100 - 4p = 0
p = $2525
R''(2525) = -4 < 0
Therefore, at $2525, revenue is maximum.
To maximize the revenue, college should charge $2525 per student.
(c) Total revenue (r) = p x q = p x (10100 - 2p) = 2525 x (10100 - 2 x 2525) = $12751250
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