Question

Before a company started selling a new digital camera, its marketing team surveyed consumers regarding whether or not they would consider buying the camera at different price levels. The table lists their estimates for the number of cameras that will sell at a particular price. (Let q represent the units sold in thousands.)

Price	Units sold (thousands)
$125	51.7
$150	43.6
$175	37.9
$200	31.5
$225	26.3

(a) Use a graphing calculator to find an exponential model of the demand function

p = D(q)

for the camera. (Give your numerical values to three decimal places.)

(b) Use the model to estimate how many cameras will sell if the camera is priced at $189. (Round your answer to the nearest integer.)

(c) According to your model, what is the elasticity of demand at the $189 price point? (Round your answer to two decimal places.)
(d) Compute the total revenue using the values in the table. Then estimate the camera price that will bring in the most revenue.

(e) Use elasticity to find the price for the camera that will bring the greatest revenue. How does it compare to your estimate in part (d)? (Round your answer to two decimal places.)

Answer 1