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ser-zykov [4K]
2 years ago
7

Suppose that the demand equation for a certain item is 1p+1x2−160=0. evaluate the elasticity at 65:

Mathematics
1 answer:
bekas [8.4K]2 years ago
4 0
Price elasticity is defined as \frac{\Delta(quantity)}{\Delta(price)}.

Here, the question has omitted to define variables, so we will ASSUME
p=price
x=variable,
and we're given
p+x^2-160=0

We calculate
\delta{x}/\delta{p} by implicit differentiation with respect to p:
1+2x (dx/dp)=0
=>
E(x)=(dx/dp)=-1/(2x)

Therefore the price elasticity at x=65 is
E(65)=1/(2*65) =-1/130 (approximately -0.00769)

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