# Demand function and finding elasticity

• Feb 3rd 2007, 12:37 PM
Mathamateur
Demand function and finding elasticity
I wasn't sure whether this should go in the Calculus or Business sections(it's a calculus class but a business themed problem) my apologies if it is in the wrong section.

For the demand function q = 800 - 2p^2 find the elasticity when p = $12 and q is the number of items produced. • Feb 3rd 2007, 01:35 PM CaptainBlack Quote: Originally Posted by Mathamateur I wasn't sure whether this should go in the Calculus or Business sections(it's a calculus class but a business themed problem) my apologies if it is in the wrong section. For the demand function q = 800 - 2p^2 find the elasticity when p =$12 and q is the number of items produced.

Now the definition of elacticity that I have here is:

$\displaystyle E=(\%\mbox{ age change in demand})/(\%\mbox{ age change in price)}=\frac{dq}{dp}\ \frac{p}{q}$.

Now:

$\displaystyle \frac{dq}{dp}=-4p$,

so:

$\displaystyle E=-4p\ \frac{p}{800-2p^2}$

So if $\displaystyle p=12$, the:

$\displaystyle E=-4 \times 12\ \frac{12}{800-288}=-1.125$

RonL