Worldwide annual sales of smartphones over a two year period were approximately

q = 4p + 3,010

million phones at a selling price of $p per phone.

(a)

Obtain a formula for the price elasticity of demand E.

E =

(b)

In one of the years the actual selling price was $395 per phone. What was the corresponding price elasticity of demand? (Round your answer to two decimal places.)

E =

Interpret your answer.

The demand was going ---Select--- down up by about % per 1% increase in price at that price level.

(c)

Use your formula for E to determine the selling price that would have resulted in the largest annual revenue.

$

What would have been the resulting annual revenue? (Round your answer to two decimal places.)

$ billion