School organizations raise money by selling candy door to door. The table shows p, the price of the candy, and q. the quantity sold at that price.
|
q
|
$ 1.00
|
$ 1.25
|
$ 1.50
|
$1.75
|
$2.00
|
$2.25
|
$ 2.50
|
|
q
|
2765
|
2440
|
1980
|
1660
|
1175
|
800
|
430
|
a. Estimate the elasticity of demand at a price of $1.00. At this price, is the demand elastic or inelastic?
b. Estimate the elasticity at each of the prices shown. What do you notice? Give an explanation for why this might be so.
c. At approximately what price is elasticity equal to 1?
d. Find the total revenue at each of the prices shown. Confirm that the total revenue appears to be maximized at approximately the price where E = 1.