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Math Help - Elasticity

  1. #1
    Newbie
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    Elasticity

    True or false?
    The demand is of unit elasticity at the indicated price p.
    D(p) = −1.5p + 7; p = 3

    I marked true and it was incorrect. Where did I go wrong?
    Here is what I did:
    <br />
\frac{3}{-1.5(3)+7} * -1.5 = -1.8<br />

    I believe thats the correct setup for elasticity. The absolute value is 1.8 which is > 1. So shouldn't it be elastic?

    BTW: The formula that was given for elasticity is \frac{P}{D(p)} * D'(p)
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  2. #2
    MHF Contributor Mathstud28's Avatar
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    If the formula

    was as you stated then should you have gone \frac{3}{D(3)}\cdot{D'(3)}=\frac{3}{-1.5\cdot3+7}\cdot{-1.5}=-1.8 as you indicated?...and since its absolute value is greater than one it is elastic...hmm are you sure you are not omitting any other details?
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