Homework Answers
Ans. P=20, Q d= 400-10p
quantity demand (Qd), when P=20
Qd= 400 - 10( 20)= 400 - 200 = 200
Qd= 400-10p
Differentiation w.r.t. 'P', we have
The elasticity of demand (Ed ) = 
= - 10 X 20/ 200
= -1
hence, the elasticity of demand is unitary elastic. which means that when price increases by 1 %, quantity demanded decreases by 1% (a negative relationship between quantity demand and price of a good) and vice versa.
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