Cathy is the manager of a convenient store. She determines that q = √30-0.01p^2 units of the store's product will be demanded (sold) when the price is p dollars per unit.

a. Find the point elasticity of demand for this commodity when the price level is at p = 40 dollars. Determine whether the demand is elastic, inelastic, or of unit elasticity at this price level. 

b. If Cathy decides to increase the price 4.9% from the current level of $40, What change in demand should she expect.

Answer rating: 100% (QA)

a To find the point elasticity of demand we need to use the following formula E pq dqdp ... View the full answer