Chapter 4
An amusement park finds that when it charges $24 for an all-day pass, attendance is
about 3700 per day. When it charges $27 , attendance is about 3400 per day.
A. Estimate the elasticity for the amusement park to two decimal places.
B. Is demand elastic or inelastic?
Learning Objectives: Calculate elasticity of demand and understand its interpretation.
difficulty: medium section: 4.6
An amusement park finds that when it charges $15 for an all-day pass, attendance is
about 2400 per day. When it charges $19 , attendance is about 2200 per day. Is daily
revenue higher at a price of $15 or a price of $19?
Learning Objectives: Understand the relationship between elasticity and revenue.
difficulty: medium section: 4.6
A youth group wishes to hold a car wash as a fundraiser. Through past experience with
car washes, they have constructed the following table, which shows the price, p, charged
for a car wash and the quantity, q, of cars washed at that price.
A. At what price is revenue maximized?
B. What is the elasticity at that price?
Learning Objectives: Understand the relationship between elasticity and revenue.
difficulty: easy section: 4.6
The demand equation for a product is
, where q is the number of units
produced, p is the price of each unit, and a and b are positive constants. Find a
formula, in terms of p, for the elasticity of demand.
Learning Objectives: Calculate elasticity of demand and understand its interpretation.
difficulty: hard section: 4.6