Question #74252

For each of the following equations, determine whether demand is elastic, inelastic, or unitary at given price
a. 4P = 100 - Q and P= $20
b. 20P = 1500 - Q and P=$5
c. P=50 - 0.1Q and P=$20

Expert's answer

For each of the following equations, determine whether demand is elastic, inelastic, or unitary at given price

a. 4P = 100 - Q, Q = 100 - 4P,

P = $20, so Q = 20,

Ed = -4*20/20 = -4, so demand is elastic.

b. 20P = 1500 - Q, Q = 1500 - 20P,

P = $5, so Q = 1400,

Ed = -20*5/1400 = -0.07, so demand is inelastic.

c. P = 50 - 0.1Q, Q = 500 - 10P,

P = $20, so Q = 300,

Ed = -10*20/300 = -0.67, so demand is inelastic.

a. 4P = 100 - Q, Q = 100 - 4P,

P = $20, so Q = 20,

Ed = -4*20/20 = -4, so demand is elastic.

b. 20P = 1500 - Q, Q = 1500 - 20P,

P = $5, so Q = 1400,

Ed = -20*5/1400 = -0.07, so demand is inelastic.

c. P = 50 - 0.1Q, Q = 500 - 10P,

P = $20, so Q = 300,

Ed = -10*20/300 = -0.67, so demand is inelastic.

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