You have a demand model for a new piece of software: D(p) = 131.5(0.9521)^P for price in dollar 10<p<30

Find the percentage rate of change at price = $15

Find elasticity at price = $15

What kind of demand at price = $15 does your elasticity indicate? Should the price at which revenue is maximized be more or less than $15? Explain

Use elasticity to find th eprice in your domain where revenue is maximized. Show the calculations

Now suppose that you produce this software in CD form and you have a fixed cost of $45 with each produced CD costing $4. Find the price that maximizes your profit and find th eoptimal profit.

THANKS!!!

 

Rate-of-change is D'(p); percentage-rate-of-change is D'(p) / D(p) * 100%.

Is the difficulty that of computing D'(p)? Exponential functions aren't all that hard to differentiate.

Elasticity is percentage-change-in-demand / percentage-change-in-price; once you've calculated D'(p) this, too, is fairly easy. (Be sure to include the negative sign: price elasticity of demand for normal goods is taken as positive.)

After that, it's cake.

You weren't expecting us to do your homework, were you?

 

THIS guy....

 

Somebody help you? More like somebody stop you!






Warren