Question

Consider the demand curve D(p) = 10-3p . What is the elasticity at price 5/3 ? ​

Answer 1

Answer:

D(p) = 10 – 3p b = ΔQ/ΔP = 3 p = 5/3 or D (5/3)= 10 - 3x5/3 Q = 10-5 =5 ed = ΔQ/ΔP x P/Q = -3 x (5/3)/5 ed= -1 i.e., the elasticity of demand at price p = 5/3 is unitary elastic.

Answer 2

Solution

Price = 5/3

D = 10 -3(5/3)

D = 10 -5

D = 5 units

∆D/∆p = -3 or ∆q/∆p = -3

Ed of demand = - p/ q ×∆q/∆ p

Ed = 1