Inverse Demand function

2010-09-01 4:22 am
is P=50-Q

find the Price elasticity of demand when P=10

is it -1x (10/40)?
=-0.25??

回答 (1)

2010-09-01 5:20 am
✔ 最佳答案
For point-price elasticity,
Ed=change in quantity demand/change in price
Ed=(∆Q/Q)/(∆P/P)
Ed=(P/Q)*(∆Q/∆P)

For the demand function P=50-Q, differentiate both sides w.r.t. Q
dP/dQ=-1 => dQ/dP=-1

When P=10, Q=50-10=40

So, the Price Elasticity of demand when P=10=(10/40)*-1=-1/4


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