When an electronics store prices a certain brand of stereos at p hundred dollars per set, it is found that q sets will be sold each month, where q2 + 2 p2 = 41.

Question

a. Find the elasticity of demand for the stereos using implicit differentiation.
b. For a unit price of p = 4 ($400), is the demand elastic, inelastic, or of unit elasticity?
c. Find the number of stereo sets that will maximize revenue (prove your answer).

Answer 1

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