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Calculating Arc and Point Elasticities of Demand

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Suppose the demand for baseballs is given by:

Qd = 360 - 6P where Qd is the quantity demanded of baseballs and P is the price of baseballs.

a) What is the Price Elasticity of Demand for baseballs between the prices of $5 and $6 (please give your answer in the form of a fraction )? Please show how to get the fraction from the decimal.

b) What is the price elasticity of demand at a price of $24?

c) what price should the firm charge if it wants to maximize its revenue?

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Solution Summary

The solution describes the steps for finding point and arc elasticity of a given demand function. It also explains the procedure to find revenue maximizing price in the given case.

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a) What is the Price Elasticity of Demand for baseballs between the prices of $5 and $6 (please give your answer in the form of a fraction )? Please show ...

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  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
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