Mark is selling gourmet apples at a price of ​$2

Question

per pound. ​ Currently, he sells 100

pounds of apples per week. This​ week, Mark raises his price to ​$3
​,
and his sales of apples fall to 75

lbs.
​Mark's initial revenue from apple sales was ​$enter your response here
.
​Mark's new revenue from apple sales is ​$enter your response here
.
Part 2
Since​ Mark's revenue increased when the price of apples​ rose, the demand for​ Mark's gourmet apples must be
▼

a. elastic
b. unitary
c. inelastic
.

Answer 1

To calculate Mark's initial revenue from apple sales, we multiply the price ($2) by the quantity (100 pounds):
Initial revenue = $2 * 100 pounds = $200.

To calculate Mark's new revenue from apple sales, we multiply the new price ($3) by the new quantity (75 pounds):
New revenue = $3 * 75 pounds = $225.

Now, to determine the elasticity of demand, we compare the percentage change in quantity demanded to the percentage change in price.
Percentage change in quantity demanded = (new quantity - initial quantity) / initial quantity * 100% = (75 - 100) / 100 * 100% = -25%.

Percentage change in price = (new price - initial price) / initial price * 100% = (3 - 2) / 2 * 100% = 50%.

Since the percentage change in quantity demanded (-25%) is less than the percentage change in price (50%), the demand for Mark's gourmet apples is inelastic. Therefore, the answer is c. inelastic.