An airline determines that when a round-trip ticket between Los Angeles and San Francisco costs p dollars
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An airline determines that when a round-trip ticket between Los Angeles and San Francisco costs p dollars (0 ≤ p ≤ 160), the daily demand for tickets is q = 256 − 0.01p2.
a. Find the elasticity of demand. Determine the values of p for which the demand is elastic, inelastic, and of unit elasticity.
b. Interpret the results of part (a) in terms of the behavior of the total revenue as a function of unit price p.
c. What price would you advise the airline to charge for each ticket? Explain your reasoning.
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Related Book For
Calculus For Business, Economics And The Social And Life Sciences
ISBN: 9780073532387
11th Brief Edition
Authors: Laurence Hoffmann, Gerald Bradley, David Sobecki, Michael Price
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