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

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Solution

Given, demand curve D(p) = 10 - 3p

Price (p) $= \frac{5}{3}$

$E_{d} = - \frac{b_{p}}{a - b_{p}}$

$\frac{- 3 \times \frac{5}{3}}{10 - 3 \times \frac{5}{3}} = \frac{- 5}{5}$

$E_{d} = - 1$

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Similar questions

Q.
When the slope of demand curve =

\infty

, price elasticity of demand =0.

Suppose there are 20 consumers for a good and they have identical demand d(p) = 10 - 3p for any price less than or equal to $\frac{10}{3}$ and $d_{1}$ (p)=0 at any price greater than $\frac{10}{3}$ . What is the market demand function?

When the slope of demand curve = infinity, the price elasticity of demand = 0.

Q. What is meant by price elasticity of demand? When will the demand curve be parallel to X-axis?

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Price elasticity of demand is identical with slope of demand curve.

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Consider the demand curve D(p) = 10 - 3p. What is the elasticity at price 53 ?

Given, demand curve D(p) = 10 - 3p Price (p) =53 Ed=−bpa−bp −3×5310−3×53=−55 Ed=−1

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

Given, demand curve D(p) = 10 - 3p

Price (p) $= \frac{5}{3}$

$E_{d} = - \frac{b_{p}}{a - b_{p}}$

$\frac{- 3 \times \frac{5}{3}}{10 - 3 \times \frac{5}{3}} = \frac{- 5}{5}$

$E_{d} = - 1$