Question

The equation for a demand curve is p = 48 3q. What is the elasticity in moving from a quantity of 5 to a quantity of 6?

Answer 1

Step-by-step explanation:

Let's find the prices at these points:

P=45-3(5)=30

P=45-3(6)=27

Now we find the percentage changes in both price and

quantity:

%AP =100(27 - 30) + 27 = -11.1%

%AQ =100(6 - 5) +5 = +20%

Hence PED =20 + -11.1 = -1.80