Relationship between elasticity and maximum revenue

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Reference no: EM131798547

Question: Revenue A product has the demand function

p = 100 - 0.5q

where p is in dollars and q is the number of units.

(a) Find the elasticity η(q) as a function of q, and graph the function

f(q) = η(q)

(b) Find where f(q) = 1, which gives the quantity for which the product has unitary elasticity.

R(q) = pq = (100 - 0.5q)q

Graph R(q) and find the q-value for which the maximum revenue occurs.

(d) What is the relationship between elasticity and maximum revenue?

Reference no: EM131798547

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