Worldwide annual sales of smartphones over a two year period were approximately q = −5p + 3,080 million phones at a selling price of $p per phone. (a) Obtain a formula for the price elasticity of demand E. E = (b) In one of the years the actual selling price was $365 per phone. What was the corresponding price elasticity of demand? (Round your answer to two decimal places.) E = Interpret your answer. The demand was going ---Select--- down up by about % per 1% increase in price at that price level. (c) Use your formula for E to determine the selling price that would have resulted in the largest annual revenue. $ What would have been the resulting annual revenue? (Round your answer to two decimal places.) $ billion
Worldwide annual sales of smartphones over a two year period were approximately q = −5p + 3,080 million phones at a selling price of $p per phone. (a) Obtain a formula for the price elasticity of demand E. E = (b) In one of the years the actual selling price was $365 per phone. What was the corresponding price elasticity of demand? (Round your answer to two decimal places.) E = Interpret your answer. The demand was going ---Select--- down up by about % per 1% increase in price at that price level. (c) Use your formula for E to determine the selling price that would have resulted in the largest annual revenue. $ What would have been the resulting annual revenue? (Round your answer to two decimal places.) $ billion
Chapter5: Elasticity Of Demand And Supply
Section: Chapter Questions
Problem 1.1P: (Calculating Price Elasticity of Demand) Suppose that 50 units of a good are demanded at a price of...
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Question
Worldwide annual sales of smartphones over a two year period were approximately
price of $p per phone.
q = −5p + 3,080
million phones at a selling (a)
Obtain a formula for the price elasticity of demand E.
E =
(b)
In one of the years the actual selling price was $365 per phone. What was the corresponding price elasticity of demand? (Round your answer to two decimal places.)
E =
Interpret your answer.
The demand was going ---Select--- down up by about % per 1% increase in price at that price level.
(c)
Use your formula for E to determine the selling price that would have resulted in the largest annual revenue.
$
What would have been the resulting annual revenue? (Round your answer to two decimal places.)
$ billion
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