Answer to Question #104297 in Microeconomics for sam

Question #104297
Demand is given by P = 24 – 4Q, where P is the price of the good and Q is the quantity
demanded. At P = 12, the own price (point) elasticity is
a. 0.25
b. 0.5
c. 1
d. 2
1
Expert's answer
2020-03-20T09:47:39-0400


Point elasticity is given by "\\frac{\\Delta{Q}}{\\Delta{P}}\\times{\\frac{P}{Q}}"

"-4Q=P-24"

"Q=6-\\frac{P}{4}"

"\\frac{\\Delta{Q}}{\\Delta{P}}=-\\frac{1}{4}"

"P=12"

"Q(12)=6-\\frac{12}{4}=3"

"E=-\\frac{1}{4}\\times{\\frac{12}{3}}=-1"

Thus, The correct answer is (c).


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