Answer:
E = -2. The demand is going down by 2% per 1% increase in price at that price level.
The price that gives a maximum revenue is $22.5. The maximum revenue is $9112.5
Step-by-step explanation:
The overall demand formula: Q = aP + b
Q = 990 - 22P
<u>Demand elasticity:</u>
At P = $30, the Q = 990 - 22×30 = 330. a = = -22
The formula for demand elasticity: E = ×
Demand elasticity at $30: E = -22 × = -2
So, The demand will be going down by 2% if 1% increase in price.
<u>Revenue:</u>
R = P×Q = P×(990 - 22P) = -22P² - 990P
R' = -44P - 990. The revenue is maximum when R' = 0
⇔0 = -44P - 990 ⇔ P = $22.5
At the P = $22.5, the Q = 990 - 22×22.5 = 495.
The maximum revenue = $22.5×495 = $11,137.5
Answer:
The combined amount is $14871.21.
Step-by-step explanation:
It is given that, the total yearly income of gentry family is <em>$29742.42</em>
<em>The % charge on income for food is 20%.</em>
<em>The % charge on income for housing is 30%.</em>
The amount in dollar from % form is given by,
=
For annual food,
=
= $5948.484
For housing budgets,
=
= $8922.726
Thus the combined amount is,
=
= $14871.21