ABC Manufacturers Ltd. produces spare part for motor vehicles. The demand
for this spare part is given by; d = 15 – 0.5p; where d = demand and p = price.
Required:
(i) Explain clearly why the coefficient of the price is negative. (2
marks)
(ii) Determine the total revenue function. (2 marks)
(iii) Determine the price elasticity at a price of Sh. 12. Clearly interpret your
answer.
(4 marks)