The demand equation for a bracelet at a jewellery store is given by $$p= 60 – 0.8q – 0.03q^2$$ for $5 \le q \le 60$, where $p$ is the price and $q$ is the quantity. The original price of the bracelet is $ \$ 32$. Suppose that there is a drop in price by $20\%$. What will the effect on demand and revenue be?
So after price drop the new price is $ \$ 32(1-0.2) = \$ 25.6$. Solving $$25.6 = 60 – 0.8q – 0.03q^2$$ gives us $$q = \frac{4\left(\sqrt{745}-10\right)}{3} \approx 23.06$$
The earlier revenue is $\$ 32 * 20 = 640$ and the new revenue is $ 25.6 * 23.06 =590.336$.
According to me: the revenue will decrease by $$\frac{640-590.336}{640}*100 \%.$$