Question: Suppose the demand function is of the form q = Cp -k , where C and k are positive constants. Find the elasticity E. If

Suppose the demand function is of the form q = Cp-k, where C and k are positive constants.

Find the elasticity E.

If 0

If k > 1, what does your answer from part (a) say about how prices should be set to maximize the revenue?

If k = 1, what does your answer from part (a) tell you about setting prices to maximize revenue?

Based on your answers above, is a demand function of the
form q = Cp-k realistic? Explain your answer.

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