you have been hired as a marketing consultant to Johannesburg Burger Supply, Inc., and you wish to come up with a unit price for its hamburgers in order to maximize its weekly revenue. To make life as simple as possible, you assume that the demand equation for Johannesburg hamburgers is linear.
(a) Your market studies reveal the following sales figures: When the price is set at $2.00 per hamburger, the sales amount to 4000 per week, but when the price is set at $4.00 per hamburger, the sales drop to zero. Use these data to find the linear demand function q(p), where p is the price per hamburger and q is the number of hamburgers they sell at that price per week.
q(p) =
(b) Find the price elasticity of demand.
E(p) =
When you raise the price by 1% from $2 per hamburger, the demand (increases/decreases) by ______ %. Deman is (elastic/inelastic/of unit elasticity )
