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The Solis Company has estimated the demand curve for its product is represented by the equation:
where is the quantity sold per year and is the price per unit.
(a) Based on the estimated demand curve, write the equations for Solis'(i) total revenue(ii) average revenue(iii) marginal revenue
(b) What is the maximum total revenue per year that Solis can obtain from sales of its product? (Give the exact dollar amount and show how you determined it.)
(c) Calculate the point price elasticity of demand for Solis' product when . Is the demand elastic or inelastic at that quantity? How do you know?
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The international parcel service has installed a new radio frequency identification system to help reduce the number of packages that are incorrectly delivered.
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