Question

Suppose the demand equation​ is: Upper Q equals 80 minus 0.25 p. What is the price elasticity of demand if the price is ​$40 per unit and output is 70 ​units? The price elasticity of demand is nothing. ​(Enter a numeric response using a real number rounded to two decimal​ places.)

Answer 1

Answer:

The price elasticity of demand is -0.25

Explanation:

The demand equation is given by:

Q = 80 - 0.25p

The price elasticity of demand is the same as the rate of change of Q (Quantity demanded) with respect to p (price).

The rate of change of Q with respect to p is obtained by differentiating Q with respect to p

Q = 8 - 0.25p

dQ/dp = -0.25

Therefore, price elasticity of demand = -0.25