4. (10 marks) Opad, the blockbuster product of Opple Inc., has a weekly demand q that declines with price p according to q = 1000 e-p/200 (a) Find the elasticity of demand e at the current price of $100.
(b) Use the elasticity of demand to calculate the marginal revenue at the current price of $100. Simplify your answer to "calculator ready".
(c) A tailor is currently producing 80 suits per month and sells them for $100 per suit. His monthly demand curve is given by q = 100 – 2/p. Find the current price elasticity of demand and use it to decide whether price should be raised or lowered to increase his revenue.

Question

4. (10 marks) Opad, the blockbuster product of Opple Inc., has a weekly demand q that declines with price p according to q = 1000 e-p/200 (a) Find the elasticity of demand e at the current price of $100.

(b) Use the elasticity of demand to calculate the marginal revenue at the current price of $100. Simplify your answer to "calculator ready".

(c) A tailor is currently producing 80 suits per month and sells them for $100 per suit. His monthly demand curve is given by q = 100 – 2/p. Find the current price elasticity of demand and use it to decide whether price should be raised or lowered to increase his revenue.

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