Prior to Covid-19, the aviation sector in Vietnam was undergoing a prolonged boom that opened up the country to rapidly growing tourism sector, which put strains on airlines and airports. With the many recent changes in the domestic aviation industry, Vietjet is reconsidering its business model and accordingly has done some market assessment.

Vietjet finds the demand q, in thousands, for their economy seats to be

q = 400 p2 (1)

Where p is the price in dollars.

(a) Interpret the elasticity of demand when the price is $5

(b) Find the price that will maximise revenue.