In this problem, p is in dollars and q is the number of units.
Suppose that the demand for a product is given by pq + p + 100q = 50,000.
(a) Find the elasticity when p = $408.
(b) Tell what type of elasticity this is.
(i) Demand is elastic.
(ii) Demand is inelastic.
(iii) Demand is unitary elastic.
(c) How would a price increase affect revenue?
(i) An increase in price will result in an increase in total revenue.
(ii) Revenue is unaffected by price.
(iii) An increase in price will result in a decrease in total revenue.