Question

Please show work

QUESTION 2 Suppose the demand function for good X p-1.8 p-0.6M6 y · Then we know that the own-price elasticity y of demand for this good is: O elastic on the upper half of the demand curve and inelastic on the lower half of the curve. O unitary at all points on the demand curve. inelastic on the upper half of the demand curve and elastic on the lower half of the curve. O elastic at all points on the demand curve.

Answer 1

The own price elasticity is given by:
$\dpi{80} \fn_phv \small E_d=\frac{dQ}{dP}*\frac{P}{Q}$

Plotting the given demand function:

15 10 5 15 10 0 20 LO LO LO LO

It is clear from the diagram that the demand for x is inelastic in the upper half and is elastic in the lower half of the curve. C is correct.