7. The demand function for a product is given by q = 250-0.5p.a. Determine the price levels for which the demand is elastic.b. What do you learn from your answer to a. about the revenue?c. Find the price levels for which demand is perfectly inelastic.d. Determine the point elasticity of demand when p = 200 and classify the demand as (perfectly)elastic, (perfectly) inelastic or of unit elasticity at this price level.e. Use your answer to d. to estimate the percentage change in quantity sold when the price is loweredfrom 200 to 197.f. Will the changes in e. result in an increase or decrease in revenue? Explain based on your answerto d. Estimate the change in revenue, using the value for the point elasticity you found in d.

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Answered: 7. The demand function for a product is…

Microeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506893

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter7: Consumer Choice And Elasticity

Section: Chapter Questions

Problem 13CQ: Suppose Erin, the owner-manager of a local hotel projects the following demand for her rooms: a....

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7. The demand function for a product is given by q = 250-0.5p.
a. Determine the price levels for which the demand is elastic.
b. What do you learn from your answer to a. about the revenue?
c. Find the price levels for which demand is perfectly inelastic.
d. Determine the point elasticity of demand when p = 200 and classify the demand as (perfectly)
elastic, (perfectly) inelastic or of unit elasticity at this price level.
e. Use your answer to d. to estimate the percentage change in quantity sold when the price is lowered
from 200 to 197.
f. Will the changes in e. result in an increase or decrease in revenue? Explain based on your answer
to d. Estimate the change in revenue, using the value for the point elasticity you found in d.

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I have a question about a) I thought that for demand to be elastic it needs to be >1 so why was it set up as ed < -1? also, we were given the answer to be 250<p<500 but I don't understand how.

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hai can u continue to solve point d to f?

link previous problem https://www.bartleby.com/questions-and-answers/calculus-question/894c3124-dc63-457d-89a9-393d4ee25495

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