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Units and Dimensions

Find the elas...

Question

Find the elasticity of demand at price $p = 20$ given the demand function $q = 120 - 4 P$ where p stands for price and q for quantity demanded.

1.0

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1.25

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1.5

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2.0

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Solution

The correct option is D $2.0$
solution:
$Q = 120 - 4 P$
putting P = 20 we get
q= 40
we know that elasticity is quantity demanded / price
$\frac{40}{20} = 2$
hence the correct option: D

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q = \frac{20}{p + 1}

p = 3.

Calculate the price elasticity of demand for a commodity when its price increases by 25 % and quantity demanded falls from 150 units to 120 units.

Consider the following demand and supply functions for a good.

Quantity demanded = 160 - 2p

Quantity supplied = - 40 + 2p

(i) Calculate the equilibrium price and quantity.

(ii) Find out a price at which there is excess demand.

(iii) Find out a price at which there is excess supply.

x

x = 200 - 4 p

p

p

p = 10

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