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Answer to Question #17229 in Calculus for hsd

Question #17229
True OR False ? No justi cation required

The company Blissful Batteries Inc. sell replacement batteries for Opple's oPad. In the following, p denotes the unit price of these batteries in dollars and q the quantity sold. We assume that the function q(p) is differentiable with q'(p) < 0. Blissful Batteries Inc. sell 10000 batteries per week at $5.00 each.

(a) If the replacement battery is a price elastic good at a unit price of $5.00 and management increases the price by a small amount, then their revenue increases.
(b) If the replacement battery is a price elastic good at a unit price of $5.00, then it is also an elastic good at a unit price of $10.00.
(c) If the replacement battery is a price elastic good at a unit price of $5.00 and management increases the price by a small amount, then their pro t increases.
Expert's answer
(a) If the replacement battery is a price elastic good at a unit price of $5.00 and management increases the price by a small amount, then their revenue increases. False. If is a price elastic good, revenue will decrease because quantity will decrease
(b) If the replacement battery is a price elastic good at a unit price of $5.00, then it is also an elastic good at a unit price of $10.00. True. If price is $10.00 it would be even more price elastic
(c) If the replacement battery is a price elastic good at a unit price of $5.00 and management increases the price by a small amount, then their pro t increases. False. If is a price elastic good, prodit will decrease because quantity will decrease

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