Answer to Question #74291 in Microeconomics for Zulfiqar Ali

Question #74291
The demand equation for a product is given by P = 30 - 0.1q^2 . (a)At what point price is demand inelastic? (b)at what price is demand unitary elastic
1
Expert's answer
2019-01-03T11:38:16-0500

(a) At what point price is demand inelastic?

Answer:

P for q = 15 is;

P=30-0.1*〖15〗^2⇨$7.5

E_p=-1*7.5/15⇨-0.5

As demand is inelastic, when price is $7.5 and quantity demanded is 15.

(b) At what price is demand unitary elastic

Answer:

P=30-0.1q^2

MR=30-0.3q^2

MR = 0, so q is:

30-0.3q^2=0

q^2 =30/0.3=100

q = 10

Then, demand unitary elastic when price is:

P=30-0.1〖*10〗^2

P = $20

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Comments

Assignment Expert
03.01.19, 18:36

Dear visitor,
please use panel for submitting new questions

Nana prempeh
03.01.19, 02:37

The demands equation is given by P=30-0.1Q^2.what what price is demand unitary elastic

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