Question
Show all work Tom's Bakery sells cakes. At the price of $20 per cake, it sells 300 per week. At the price of $50, it
Show all work
Tom's Bakery sells cakes. At the price of $20 per cake, it sells 300 per week. At the price of $50, it sells 150 cakes per week.
a. Find a (linear demand function D(x)) that models this situation.
b. Find the elasticity of demand E(x) = xD(x) /D(x)
c. FindE(20) andE(50), and explain what these numbers represent.
d. Using thedemandfunction from part (a), find the price x that results in unit elasticity, and explain what this number represents. Also, determine the weekly revenue R(x) =xD(x) at this price.
e. Find an (exponential demand function) of the form f(x) = P0ekxthat models the Bakery sales.
f. Using the demand function in part (e), find the price (x) that results in unit elasticity, and explain what this number represents. Also, determine the weekly revenue at this price.
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