Question

Worldwide annual sales of smartphones over a two year period were approximately q = -5p + 3,050 million phones at a selling price of $p per phone. (a) Obtain a formula for the price elasticity of demand E. E = 5p / (-5p + 3050) (b) In one of the years the actual selling price was $375 per phone. What was the corresponding price elasticity of demand? (Round your answer to two decimal places.) E = 1.60 Interpret your answer. The demand was going down by about 1.60 % per 1% increase in price at that price level. (c) Use your formula for E to determine the selling price that would have resulted in the largest annual revenue. $ 375.38 What would have been the resulting annual revenue? (Round your answer to two decimal places.) $ (No Response) billion

          Worldwide annual sales of smartphones over a two year period were approximately q = -5p + 3,050 million phones at a selling price of $p per phone.

(a) Obtain a formula for the price elasticity of demand E.
E = 5p / (-5p + 3050)

(b) In one of the years the actual selling price was $375 per phone. What was the corresponding price elasticity of demand? (Round your answer to two decimal places.)
E = 1.60

Interpret your answer.
The demand was going down by about 1.60 % per 1% increase in price at that price level.

(c) Use your formula for E to determine the selling price that would have resulted in the largest annual revenue.
$ 375.38

What would have been the resulting annual revenue? (Round your answer to two decimal places.)
$ (No Response) billion

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Worldwide annual sales of smartphones over a two year period were approximately q = -5p + 3,050 million phones at a selling price of p per phone.

(a) Obtain a formula for the price elasticity of demand E.
E = 5p / (-5p + 3050)

(b) In one of the years the actual selling price was375 per phone. What was the corresponding price elasticity of demand? (Round your answer to two decimal places.)
E = 1.60

Interpret your answer.
The demand was going down by about 1.60 % per 1% increase in price at that price level.

(c) Use your formula for E to determine the selling price that would have resulted in the largest annual revenue.
375.38

What would have been the resulting annual revenue? (Round your answer to two decimal places.) (No Response) billion

Added by Christopher W.

Calculus: Early Transcendentals

James Stewart 8th Edition

Instant Answer

Solved by Expert Maitreya E

04/11/2022

Step 1

E = (375p + 3050) / (375p) If we plug in $375 for p, we get: E = (375*375 + 3050) / (375*375) = 1.60 This means that for every 1% increase in price, the demand decreases by approximately 1.60%. Show more…

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Worldwide annual sales of smartphones over a two year period were approximately q = -5p + 3,050 million phones at a selling price of $p per phone. (a) Obtain a formula for the price elasticity of demand E. E = 5p / (-5p + 3050) (b) In one of the years the actual selling price was $375 per phone. What was the corresponding price elasticity of demand? (Round your answer to two decimal places.) E = 1.60 Interpret your answer. The demand was going down by about 1.60 % per 1% increase in price at that price level. (c) Use your formula for E to determine the selling price that would have resulted in the largest annual revenue. $ 375.38 What would have been the resulting annual revenue? (Round your answer to two decimal places.) $ (No Response) billion

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Transcript

00:01 Hello students, so here's the annual sale for smartphone, which is given by q is equal to minus 5 plus 350.

00:09 Okay, and selling price is 5p.

00:11 So we have to find out what is the price of elasticity of demand.

00:16 That's e.

00:17 And then the value of p is 375, what will be the price and elasticity of demand.

00:24 Okay.

00:25 And to get largest revenue, largest annual revenue, what must be the value of p? okay, we can start with the price elasticity of demand, e, okay, and the equation is selling price divided by the annual.

00:41 So here we have e, which is equal to 5p divided by, okay, here we have 5p divided by minus 5 p, plus 3 ,050.

01:04 Okay, so this will be our first answer answer to the part a, price elasticity of demand, okay, 5p divided by minus 5p, 5p plus 3 ,050.

01:18 Okay, we have to find the value of e when p is 375.

01:28 So we can substitute in the equation that c is equal to 5, 375.

01:37 Divided by minus 5 ,375 plus 3 ,050.

01:49 And the answer will be 1 .6.

01:54 So how can we interpret this answer? this 1 .60.

02:00 So we can interpret as the demand was going down by about 1 .60 % per 1 % increase in the price with that right.

02:09 So the demand is decreasing, it's going down, okay? so in part c, we have to find the selling price to get maximum and with the largest annual revenue...

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