Compute the elasticity of demand for the new sandwich

Reference no: EM131798467

Question: The owner and manager of Pleasantville Deli is considering the expansion of current menu offerings to include a new line of take-out sandwiches. The deli serves primarily the Pleasantville business districts and students from a nearby college, yet it is unclear exactly what level of demand to anticipate for this new product offering and how to price the product in order to maximize sales. Over the past few months the information shown in the table was collected from existing customers and from mailings to businesses in the area.

(a) Develop a function p = f(q) that represents this demand schedule.

(b) Compute the elasticity of demand for the new sandwich.

(c) Find the elasticity at the possible prices of $4 and $10. Classify these prices as elastic, inelastic, or unitary elastic.

(d) Determine the price and quantity that would maximize weekly revenues for the new sandwich. Find the maximum weekly revenue.

Reference no: EM131798467

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