Question

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

Answer 1

In economy, as a result of change in another variable, elasticity measures responsive change in one variable. Price demand elasticity (PED) measures responsive quantity change required as a result of unit price change.

Answer 2

Demand function is Q = 75-5p

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

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