Business Econ: Limits and Continuity

Question

Suppose customers in hardware store are willing to buy N(p) boxes of nails at p dollars per box, as given by the following function. N(p)= 100-4p² ; 1 ≤ p ≤ 4

a.) Find the average rate of change of demand for a change in price from $2 to $3.

The average rate of change of demand for a change in price from $2 to $3 is _ boxes per dollar.



(Type an integer or a decimal.)

Answer 1

Key Definitions:

1. Rate of Change is defined as the SLOPE of the line that connects the two end points. In this case the end points are the answers for $2 and $3.

Step 1: Answer the function for $2 and $3

N(2)= 100-4(2)² = 84

N(3)= 100-4(3)² = 64

Step 2: Calculate the slope between the two points.

64-84

3 - 2

Your answer is therefore -20.