Question details

Check your undestaning week 6
$ 15.00

By using the arc price formula, the new price will be

%ΔP = P2 – P1 / [(P2 + P1)/2]

      –0.075 = (P2 – 15.00)/ [(P2 + 15)/2]

                  -0.075P2 – 1.125 = 2P2 – 30

                   -2.075P2 = -28.875

                      P2 = $13.92

      ΔP = $15 –$13.92 = $1.08       

Finding new quantity using the arc price formula:

             %ΔQ = Q2 – Q1     / [(Q2 + Q1)/2]

                0.15 = (Q2 – 30,000)/ [(Q2 + 30,000)/2]

                Q2 = 34,865 gallons (QUANTITY SOLD)

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