Answered step by step
Verified Expert Solution
Link Copied!

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

image text in transcribed
image text in transcribed
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

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Concepts In Differential Geometry

Authors: K N P Singh

1st Edition

9353146399, 9789353146399

More Books

Students also viewed these Mathematics questions