Question

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