A study of about 1,800 U.S. colleges and universities resulted in the demand equation q = 9,900 − 2p, where q is the enrollment

Question

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A study of about 1,800 U.S. colleges and universities resulted in the demand equation q = 9,900 − 2p, where q is the enrollment

at a college or university, and p is the average annual tuition (plus fees) it charges. (a) The study also found that the average tuition charged by universities and colleges was $2,700. What is the corresponding price elasticity of demand? (Round your answers to two decimal places.)

Business

1 answer:

Ratling [72] · Answer 1 · 2022-05-13T03:04:48+03:00

Answer:

The corresponding price elasticity of demand is -2.00.

Explanation:

The price elasticity of demand is obtained by differentiating the demand equation with respect to the average annual tuition fees (p).

The demand equation is q = 9,900 - 2p

Differentiating q with respect to p

dq/dp = -2 (differentiation of a constant is 0)

Therefore, the price elasticity of demand is -2.00.