Question

Consider the demand curve $D\left(p\right)=10-3p$. What is the elasticity at price $\frac{5}{3}$?

Answer 1

Given, demand curve D(p) = 10 - 3p
Price =$\frac{5}{3}$
$D=10-3\times \frac{5}{3}=10-5=5$
$D=5$ units
$D\left(p\right)=10-3p$
$\frac{△D}{△p}=-3or\frac{△q}{△p}=-3$
Elasticity of demand $\left(E_d\right)$= (-) $\frac{p}{q}\times \frac{△q}{△p}$ =$(-)
\dfrac{5/3}{5}\times -3$
$E_d=(-)\frac{5}{3}\times \frac{1}{5}\times -3$
$E_d=1$

$\Rightarrow$

$\therefore$ Elasticity of demand $=1$.