Ask Question
9 June, 15:11

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.)

+1
Answers (1)
  1. 9 June, 16:06
    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 you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers