If UMB Bank in St. Louis asks target members who do not have a checking account or a savings account with UMB Bank the following
1 answer:
You might be interested in
Answer:
0.30
Demand is inelastic and an increase in price would lead to an increase in total revenue
Explanation:
P=300−0.02Q
Make q the subject of the formula by dividing through by 0.02
50P = 15,000 - Q
Q = 15,000 - 50P
Differentiate the above equation
Determine the value of q when p is 70
Q = 15,000 - 50(70) = 11,500
Elasticity =
[ = 0.30
Demand is inelastic and an increase in price would lead to an increase in total revenue
Price elasticity of demand measures the responsiveness of quantity demanded to changes in price of the good.
Price elasticity of demand = percentage change in quantity demanded / percentage change in price
If the absolute value of price elasticity is greater than one, it means demand is elastic. Elastic demand means that quantity demanded is sensitive to price changes.
Demand is inelastic if a small change in price has little or no effect on quantity demanded. The absolute value of elasticity would be less than one
Demand is unit elastic if a small change in price has an equal and proportionate effect on quantity demanded.
Infinitely elastic demand is perfectly elastic demand. Demand falls to zero when price increases
Perfectly inelastic demand is demand where there is no change in the quantity demanded regardless of changes in price.