Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Roland Incorporated manufactures and sells portable hair dryers. If the price of a hair dryer is $ 133.00, then the company sells 100 hair dryers
Roland Incorporated manufactures and sells portable hair dryers. If the price of a hair dryer is $ 133.00, then the company sells 100 hair dryers per week, and the elasticity of demand is -0.492. Assume that the demand function is differentiable and that the only time the company sells exactly 100 hair dryers per week is when the price of a hair dryer is $ 133.00. Given this situation, which of the following do you know MUST be true? [Hint: Recall that marginal revenue is the derivative of revenue with respect to quantity.] O a) The marginal profit is positive when Roland sells 100 driers per week. O b) The marginal revenue is positive when Roland sells 100 driers per week. O c) The marginal revenue is negative when Roland sells 100 driers per week. O d) The marginal profit is negative when Roland sells 100 driers per week
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started