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find the elasticity of demand at the price p=2.5 with the demand of p.x=72.5 the...
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`p xx x=72.5` `x=72.5/p` `dx/(dp)= -72.5/p^2`
`E_d= (dx/(dp))(p/x)= -72.5 /p^2 xx p^2/72.5=-1`
Posted by oldnick on May 10, 2013 at 11:59 PM (Answer #3)
First, calculate the demand function (x)
px = 72.5
x = 72.5/p
In order to calculate the elasticity of demand, use the following equation:
Next, calculate the derivative `dx/(dp)` :
Substitute the equations for x and `dx/(dp)` into the equation for the elasticity of demand, and solve:``
The demand in price is inelastic as the elasticity of demand is a value less than 1.
Posted by crmhaske on May 10, 2013 at 5:03 PM (Answer #1)
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