If the value of the price elasticity of demand is 0.7, the...

Transcript

00:01 X equal to f of p equal to 875 negative p negative 0 .05 time p square so here in the discussion we have to use the price demand equation to determine whether demand is elastic is inelastic or has unit elasticity and the indicated values of p so here you can see that a p equal to 50 part b p equal to 70 and part c p equal to 100 so here in this question first of all we have to find the elasticity of demand so we know that e of p equal to negative p time derivative of f of p upon f of p.

01:16 So here we have to find the derivative of f of p which is first term the derivative of first term is zero and the derivative of second term is negative one.

01:30 And you can see that third room here we get negative 0 .1 time p's p so now we put that value here so we get negative p time negative 1 negative 0 .1 time p upon 875 negative p negative 0 .05 negative p time p squared so now we simplify this and we get p time 1 plus 0 .1 time p upon 875 negative p negative 0 .05 time p square so that is the elasticity of demand now we have to determine demand demand is elastic inelastic or unit elasticity so point is given part a p equal to 50 so we put here e of 50 equal to 50 time 1 plus 0 .1 time 50 upon 875 negative 50 negative 0 .05 time 50 to the power 2 so now we simplify this and we get 0 .4 to 9.

03:29 So here we know that e of 50 less than to 1 so the demand is inelastic so here since e of 50 less than to 1 so the demand is anelastic.

04:02 So it is our final answer for part a.

04:06 Now we solve part b, b equal to 70.

04:13 So now we put here, e of 70 equal to 70 times 1 plus 0 .1 time time 70 upon 80075 negative 70 negative 0 .05 time 70 to the power 2...

Question

If the value of the price elasticity of demand is 0.7, the demand is said to be A. unit elastic. B. inelastic. C. partially inelastic. D. elastic. E. partially elastic.

Question

If the value of the price elasticity of demand is 0.7, the demand is said to be A. unit elastic. B. inelastic. C. partially inelastic. D. elastic. E. partially elastic.

Please give Ace some feedback