Q2

Solve the problem. An airline determines that when a round-trip ticket between Los Angeles and San Francisco costs p dollars (0

127.28, inelastic when p 103.92, and of unit elasticity when p = 103.92. b. If a ticket costs less than $103.92 then revenue is decreasing as the price increases. If the cost is more than $103.92 then revenue increases with price. If the price equals $103.92 then revenue is unaffected by a small change in price. O 0.01p a. E(p) = 324-0.01p Demand is elastic when p 127.28, and of unit elasticity when p = 127.28. b. If a ticket costs less than $127.28 then revenue is decreasing as the price increases. If the cost is more than $127.28 then revenue increases with price. If the price equals $127.28 then revenue is unaffected by a small change in price. O 0.02p2 a . E( p ) = 324 -0.01p Demand is elastic when p > 103,92, inelastic when p