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A bakery works out a demand function for its chocolate chip cookies and finds it to be q=D(x)=906-13x, where q is the quantity of cookies sold when the price per cookie, in cents, is x. Use this information to answer parts a) through f). a) Find the elasticity. E(x)= b) At what price is the elasticity of demand equal to 1? (Round to the nearest cent as needed.) c) At what prices is the elasticity of demand elastic? OA. Greater than 35¢ OB. Prices cannot be elastic in this case OC. Less than 35¢ OD. Prices are elastic at all values. d) At what prices is the elasticity of demand inelastic? OA. Greater than 35 OB. Less than 35g OC. Prices cannot be inelastic in this case OD. Prices are inelastic at all values e) At what price is the revenue a maximum? x=¢ (Round to the nearest cent as needed. Use a comma to separate answers as needed.) f) At a price of 17€ per cookie, will a small increase in price cause the total revenue to increase or decrease? O Decrease O Increase

A bakery works out a demand function for its chocolate chip cookies and finds it to be q=D(x)=906-13x, where q is the quantity of cookies sold when the price per cookie, in cents, is x. Use this information to answer parts a) through f). a) Find the elasticity. E(x)= b) At what price is the elasticity of demand equal to 1? (Round to the nearest cent as needed.) c) At what prices is the elasticity of demand elastic? OA. Greater than 35¢ OB. Prices cannot be elastic in this case OC. Less than 35¢ OD. Prices are elastic at all values. d) At what prices is the elasticity of demand inelastic? OA. Greater than 35 OB. Less than 35g OC. Prices cannot be inelastic in this case OD. Prices are inelastic at all values e) At what price is the revenue a maximum? x=¢ (Round to the nearest cent as needed. Use a comma to separate answers as needed.) f) At a price of 17€ per cookie, will a small increase in price cause the total revenue to increase or decrease? O Decrease O Increase

Microeconomics: Private and Public Choice (MindTap Course List)
Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter7: Consumer Choice And Elasticity
Section: Chapter Questions
Problem 13CQ: Suppose Erin, the owner-manager of a local hotel projects the following demand for her rooms: a....
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A bakery works out a demand function for its chocolate chip cookies and finds it to be q = D(x) = 906-13x, where q is the quantity of cookies sold when the price per cookie, in cents, is x. Use this information to answer parts a) through f). a) Find the elasticity. E(x) = b) At what price is the elasticity of demand equal to 1? (Round to the nearest cent as needed.) c) At what prices is the elasticity of demand elastic? O A. O B. O C. Less than 35¢ O D. Prices are elastic at all values. Greater than 35¢ Prices cannot be elastic in this case d) At what prices is the elasticity of demand inelastic? OA. Greater than 35¢ OB. Less than 35¢ OC. Prices cannot be inelastic in this case O D. Prices are inelastic at all values e) At what price is the revenue a maximum? x=¢ (Round to the nearest cent as needed. Use a comma to separate answers as needed.) f) At a price of 17¢ per cookie, will a small increase in price cause the total revenue to increase or decrease? O O Decrease Increase
Transcribed Image Text:A bakery works out a demand function for its chocolate chip cookies and finds it to be q = D(x) = 906-13x, where q is the quantity of cookies sold when the price per cookie, in cents, is x. Use this information to answer parts a) through f). a) Find the elasticity. E(x) = b) At what price is the elasticity of demand equal to 1? (Round to the nearest cent as needed.) c) At what prices is the elasticity of demand elastic? O A. O B. O C. Less than 35¢ O D. Prices are elastic at all values. Greater than 35¢ Prices cannot be elastic in this case d) At what prices is the elasticity of demand inelastic? OA. Greater than 35¢ OB. Less than 35¢ OC. Prices cannot be inelastic in this case O D. Prices are inelastic at all values e) At what price is the revenue a maximum? x=¢ (Round to the nearest cent as needed. Use a comma to separate answers as needed.) f) At a price of 17¢ per cookie, will a small increase in price cause the total revenue to increase or decrease? O O Decrease Increase
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