Originally Posted by ADARSH
When the selling price of a packet of 20 cigarettes is £2.25 the weekly demand in the UK is 11 million and when the selling price is £4 the weekly demand is 7.5 million.
(a)Find the demand equation stating q, the weekly demand in millions, in terms of p, the selling price in £, assuming that this is a linear relationship.
I get this to be P = -2q + 13
(b)Suppose that the selling price of a packet of cigarettes is made up of two elements, the seller’s revenue per packet and the tax paid to the exchequer per packet. You are given that the seller’s revenue is fixed at £1.25 per packet although the tax paid to the exchequer per packet can be changed. Find an expression for each of the following in terms of p, the selling price in £:
(i) C – the total combined weekly revenue measured in £millions,
(ii) S – the total seller’s weekly revenue measured in £millions,
(iii) E – the total exchequer’s weekly revenue measure in £millions.