Question

If the demanding Law is given by $q=\frac{20}{p+1}$, find the elasticity of demand with respect to price at the point when $p=3.$

• A. $\frac{4}{3}$
• B. $-\frac{3}{4}$
• C. $\frac{2}{3}$
• D. $-\frac{3}{2}$

Answer 1

The correct option is B $-\frac{3}{4}$

Elasticity of demand $=\frac{\frac{dq}{q}}{\frac{dp}{p}}=-\frac{p}{(p+1)}$

When $p=3$

Elasticity of demand $=-\frac{3}{4}$