A bakery works out a demand function for its chocolate chip cookies and finds it to be , where is the quantity of cookies sold when the price per cookie, in cents, is . Use this information to answer parts a) through f). a) Find the elasticity.
E(x) =
b) At what price is the elasticity of demand equal to 1?
()
(Round to the nearest cent as needed)
c) At what prices is the elasticity of demand elastic?
1. Prices are elastic at all values
2. Prices cannot be elastic in this case
3. Greater than 16c 4. Less than 16c
d) At what prices is the elasticity of demand inelastic?
1. Prices cannot be inelastic in this case
2. Greater than 16c
3. Less than 16c
4. Prices are inelastic at all values
e) At what price is the revenue a maximum?
x =
(Round to the nearest cent as needed Use a comma to separate answers as needed)
f). At a price of 22 per cookie, will a small increase in price cause the total revenue to increase or decrease?
1. Decrease
2. Increase