Find the elasticity of demand E for the demand function q 4

Solution

a) Elasticity of demand is calculated using the following formula: E = (dq/dp)*(p/q) So dq/dp = -8p E = (dq/dp)*(p/q) = -8p (p/30,000-4p^(2)) = -8p^(2)/30,000-4p^(2)) = -2p^(2)/7500-p^(2) (I assume your answer for (a) is positive since we\'re considering the absolute value of the price elasticity of demand.)