Elasticity of Demand

• Mar 27th 2013, 09:33 AM
hellokitty999
Elasticity of Demand
The demand equation for a certain product is given by p = 10e^(-0.001q)
where p is the price in dollars and q is the quantity in units.

a) Find the elasticity of demand when 200 units are produced.

b) Interpret your result form part a) by analyzing the revenue when the unit price is decreased.
• Mar 27th 2013, 12:35 PM
ILikeSerena
Re: Elasticity of Demand
Quote:

Originally Posted by hellokitty999
The demand equation for a certain product is given by p = 10e^(-0.001q)
where p is the price in dollars and q is the quantity in units.

a) Find the elasticity of demand when 200 units are produced.

b) Interpret your result form part a) by analyzing the revenue when the unit price is decreased.

Hi hellokitty999! :)

Elasticity of demand is $\frac{P}{Q_d} \times \frac{1}{\frac{dP}{dQ_d}}$.

Can you calculate that?
• Mar 27th 2013, 12:37 PM
hellokitty999
Re: Elasticity of Demand
I have no idea can you show me steps please ?!
• Mar 27th 2013, 12:40 PM
ILikeSerena
Re: Elasticity of Demand
Quote:

Originally Posted by hellokitty999
I have no idea can you show me steps please ?!

It's no fun for me to just give you a complete answer.

For starters, what is the price for a demand quantity of 200 units?
• Mar 27th 2013, 12:42 PM
hellokitty999
Re: Elasticity of Demand
Do I just put 200 in place of q
• Mar 27th 2013, 12:49 PM
ILikeSerena
Re: Elasticity of Demand
Yep!
• Mar 27th 2013, 02:05 PM
hellokitty999
Re: Elasticity of Demand
Ok and from there
• Mar 27th 2013, 02:06 PM
ILikeSerena
Re: Elasticity of Demand
Well... what it the price for a demand of 200?
• Mar 27th 2013, 02:08 PM
ILikeSerena
Re: Elasticity of Demand
Ah well.
If you don't want to learn and don't want to try, that's up to you.
Perhaps someone else will pick up this thread and give a complete solution.