Robinson plastics makes clear plastic products. They invented a new cup to crush medication. A survey of local drug manufacturers and retailers suggests that market demand for the next year will be:
Q=2,000,000-100,000P+5A
where Q=unit sales, P=price in dollars, and A=advertising expense.
They are considering a price of one or two dollars and an advertising budget of $10,000.
Production cost=$.75 per unit
A. Compute the quantity sold and elasticity at a price of both $1 and $2 with the given advertising budget.
B. What is the advertising elasticity at $2? Given an interpretation of the advertising coefficient.