Schneider's Bakery sells cakes. At a price of $20 per cake, itsells 500 cakes per week. At a price of $40, it sells 300 cakes perweek.
(a) (2.5 points) Find a linear demand function ?(?)D(x) thatmodels this situation.
(b) (2.5 points) Find the elasticity of demand.
(c) (2.5 points) Find ?(20)E(20) and ?(50)E(50), and explainwhat these numbers represent.
(d) (2.5 points) Using the linear demand function from part (a),find the price ?x that results in unit elasticity, and explain whatthis number represents. Also, determine the weekly revenue at thisprice.
