Consider the following demand equation for a good:p =(200) / (q + a)^2where a is a constant.(a) Find dq/dp .(b) Find the expression for elasticity, η, such that only q and a appear. (Hint: Use the original function for demand to get rid of p).(c) Find a. such that at q = 20 demand is unitary elastic.(d) Classify the demand at q < 20 and q > 20 as elastic and inelastic for the a value found in the previouspart. Explain what happens to revenue as price increases for both q < 20 and q > 20.

The given demand equation is, Now, calculate the equation in terms of q, Now, dq/dp can be…

Answered: (a) Find dq/dp . (b) Find the…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Consider the following demand equation for a good:
p =(200) / (q + a)^2

where a is a constant.

(a) Find dq/dp .

(b) Find the expression for elasticity, η, such that only q and a appear. (Hint: Use the original function for demand to get rid of p).

(d) Classify the demand at q < 20 and q > 20 as elastic and inelastic for the a value found in the previous
part. Explain what happens to revenue as price increases for both q < 20 and q > 20.

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