The demand function for a new espresso drink at a popular coffee shop is given by x = 0.4(81 – p² )"² where x is the quantity of drinks demanded every hour and p is the unit price in dollars per drink. (a) Evaluate the price elasticity of demand at 8 dollars per drink. Elasticity: (b) Complete the sentence: Because demand is ? the unit price should be ? the current $8 per drink in order to increase revenue. (c) At what price is the demand of unitary elasticity? p = dollars

The demand function for a new espresso drink at a popular coffee shop is given by x = 0.4(81 – p² )"² where x is the quantity of drinks demanded every hour and p is the unit price in dollars per drink. (a) Evaluate the price elasticity of demand at 8 dollars per drink. Elasticity: (b) Complete the sentence: Because demand is ? the unit price should be ? the current $8 per drink in order to increase revenue. (c) At what price is the demand of unitary elasticity? p = dollars

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter3: Demand Analysis

Section: Chapter Questions

Problem 6E

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