Question: Suppose the demand (in thousands) for a toaster is given by 100p2, where p is the price in dollars charged for the toaster. a. If

Suppose the demand (in thousands) for a toaster is given by 100p2, where p is the price in dollars charged for the toaster.

a. If the variable cost of producing a toaster is $10, what price will maximize profit?

b. The elasticity of demand is defined as the percentage change in demand created by a 1% change in price. Show that the demand for toasters appears to have constant elasticity of demand. Would this be true if the demand for toasters were linear in price?

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