Let the price elasticity of demand be 1. Let the price be $100/MWh. Let consumption be...
Let the price elasticity of demand be 1. Let the price be $100/MWh. Let consumption be 50,000MWh. Which of the following would be the demand equation for electricity?
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Q = 500P + 1000 |
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Q = 500P |
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Q = 5000P - 500,000 |
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None of the above. |
Homework Answers
Putting P=100, we getQ=50,100 in first option, for second we get Q=500*100=50,000 for third option we get Q=5000*100-500,000=0 Since actual consumption is 50,000 only option two fits and dQ/dP for option 2 is also 1 which is elasticity Hence, Q=5000 P is correct
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