Question

given the demand function Q=75-5p find the price elasticity of demand at p=3 and p=5.

Answer 1

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Answer 2

Given details:

Demand function is Q = 75-5p

Formula:

Price of elasticity of demand (Ed) = Marginal function / Average function.

Solution:

when the given function is differentiated with respect to 'p', then,

Marginal function = dQ/dp = 0 - 5 = -5

Average function = Q / p

Therefore,

Ed =  dQ/dp /  Q / p

= -5p / Q

Ed = - 5p / 75-5p

At p = 3,

Ed = -5 * 3 / 75 - (5*3)  

    = -15/ 60

Ed = -0.25

At p = 5,

Ed = -5 * 5 / 75 - (5*5)  

    = -25/ 50

Ed    = -0.5