Worldwide annual sales of smart phones in over a five-year period were projected to be approximately q=-10p+4440 million phones at a selling price of $P per phone.Obtain a formula for the price of elasticity of demand E.In one particular year the actual selling price was $271 per phone. What was the corresponding price elasticity of demand?Use your formula for E to determine the selling price that would’ve resulted in the largest annual revenue. What, nearest to the nearest 10 million, would have been the resulting annual revenue? Tutorial ExerciseWorldwide annual sales of smartphones in over a 5 year period were projected to be approximatelyq = -10p + 4,440 million phones at a selling price of $p per phone.(a) Obtain a formula for the price elasticity of demand E(b) In one particular year the actual selling price was $271 per phone. What was the corresponding priceelasticity of demand? Interpret your answer.(c) Use your formula for E to determine the selling price that would have resulted in the largest annualrevenue. What, to the nearest $10 million, would have been the resulting annual revenue?

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Answered: Tutorial Exercise Worldwide annual…

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

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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Worldwide annual sales of smart phones in over a five-year period were projected to be approximately q=-10p+4440 million phones at a selling price of $P per phone. Obtain a formula for the price of elasticity of demand E. In one particular year the actual selling price was $271 per phone. What was the corresponding price elasticity of demand? Use your formula for E to determine the selling price that would’ve resulted in the largest annual revenue. What, nearest to the nearest 10 million, would have been the resulting annual revenue?

Tutorial Exercise
Worldwide annual sales of smartphones in over a 5 year period were projected to be approximately
q = -10p + 4,440 million phones at a selling price of $p per phone.
(a) Obtain a formula for the price elasticity of demand E
(b) In one particular year the actual selling price was $271 per phone. What was the corresponding price
elasticity of demand? Interpret your answer.
(c) Use your formula for E to determine the selling price that would have resulted in the largest annual
revenue. What, to the nearest $10 million, would have been the resulting annual revenue?

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