Explanation Given: The demand equation is, p = 9 − 0.02 x ( 0 ≤ p ≤ 450 ) Where, x is the quantity demanded per week. p is the unit price in hundreds of dollars. Definition used: (1) If the value of E ( p ) > 1 then the demand is said to be elastic. (2) If the value of E ( p ) = 1 then the demand is said to be unitary. (3) If the value of E ( p ) < 1 then the demand is said to inelastic. Formula used: The elasticity of demand is given by the relation, E ( p ) = − p f ' ( p ) f ( p ) (1) Calculation: Rewrite the given equation as a function of p , p = 9 − 0.02 x p 2 = 9 − 0.02 x ( Square both sides ) x = 450 − 50 p 2 x = f ( p ) Differentiate the function f ( p ) with respect to p

10th Edition

ISBN: 9781337825597

Author: Tan

Publisher: INTER CENG

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Chapter 3.4, Problem 39E

To determine

The elasticity of demand and range of the demand when it is elastic, unitary or inelastic.

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Chapter 3 Solutions

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The elasticity of demand and range of the demand when it is elastic, unitary or inelastic.

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The elasticity of demand and range of the demand when it is elastic, unitary or inelastic.

Chapter 3 Solutions