Compute the elasticity of demand

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The Physics Club sells E = mc2 T-shirts at the local flea market. Unfortunately, the club's previous administration has been losing money for years, so you decide to do an analysis of the sales. A quadratic regression based on old sales data reveals the following demand equation for the T-shirts: x = −2p2 + 36p (9 ≤ p ≤ 16). Here, p is the price the club charges per T-shirt, and x is the number of shirts it can sell each day at the flea market. (a) Obtain a formula for the price elasticity of demand for E = mc2 T-shirts. E = (b) Compute the elasticity of demand if the price is set at $10.50 per shirt. (Round your answer to two decimal places.) Interpret the result. The demand for E = mc2 T-shirts is going Correct: Your answer is correct. by about % per 1% increase in the price. (c) How much should the Physics Club charge for the T-shirts in order to obtain the maximum daily revenue? $ What will the maximum revenue be? $

Reference no: EM131075088

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