Question

What is the price elasticity of demand when the demand function is Q = 200 – P2 – 6P? Is demand elastic or inelastic when P = 5?

2P+6P Answer. E=3 At P=5, E = 80/145, demand is inelastic. 200 - P2 - 6PA

Answer 1

Price elasticity of demond: shows the relationship between frice and quantity demonded and provides a freuise calculations of the effect of a change in frice On quantity demanded P.E.D = %- Change in Quantity demanded. % Change in frice Alse PED - -dQx® > 0 dp ng 70 go Q=200-P2 - 6P ③ do 3.-2P-6 dP de do = -(2P+6) 4 futting this in ① P.E.D. =) - (2P+6) X-P Fran 2 we know that Q.= 200-1261 P.E. D7 +(2 8² +68) 200-P2-6P

Now but P = 5 P.E.D- 2(5)*7652 200-5²-6(s) P.E.D=80 145 As elasticity lies between 10 to 1). Therefore it is inelastic