Point elasticity of demand
Three Peaks Ski resort has estimate the following demand curve for their lift ticket
Q=7000-160P+40A
Where Q= weekly number of lift tickets, P=price pf lift ticket, A=number of newspaper ads week
Question:
A. The Three Peaks charges $25 per ticket and has 5 advertisement notices in the local newspapers. How many lift tickets do they expect to sell
B. Keeping the advertisement level the same (at 5), calculate the point(price) elasticity at the above price ($25 per ticket)
C. Determine the point elasticity of demand with respect to advertisement