Answer to Question #88182 in Microeconomics for Kanaha

Question

Given the demand equation, Q = 120000 -10P2 (a) for this equation, write the expression for the point price elasticity of demand as a function of P (b) Over what range of the prices is the demand inelastic?

Answer 1

(a) Q = 120000 - 10P, so the expression for the point price elasticity of demand as a function of P is Ed = -10*P/Q.

(b) Demand is inelastic, when P < Q more than in 10 times.