Ask Question
17 October, 09:27

Suppose the demand equation is: Upper Q equals 120 minus 1.25 p. What is the price elasticity of demand if the price is $60 per unit and output is 45 units? The price elasticity of demand is nothing. (Enter a numeric response using a real number rounded to two decimal places.)

+4
Answers (1)
  1. 17 October, 09:34
    0
    -1.67

    Explanation:

    Given that,

    Q = 120 - 1.25p

    Initial price, p = $60 per unit

    Initial quantity, q = 45 units

    Q = 120 - 1.25p

    Now, differentiating Q with respect to price,

    dQ/dp = - 1.25

    Therefore,

    Price elasticity of demand:

    = (dQ/dp) * (p : q)

    = - 1.25 * (60 : 45)

    = - 1.25 * 1.33

    = - 1.67

    This means that the demand is elastic.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Suppose the demand equation is: Upper Q equals 120 minus 1.25 p. What is the price elasticity of demand if the price is $60 per unit and ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers