Alex T Quiz Chapter 11 Quiz This Question 1 pt 12 of 15 10 c

Alex T Quiz: Chapter 11 Quiz This Question: 1 pt 12 of 15 (10 complete) p=50-0.5Q, what is the price elasticity of demand and revenue at Q 84? The price elasticity of demand is (Enter your response rounded to three decimal places and include a minus sign)

Solution

P=50-0.5Q

0.5Q=50 –P

Q=100-2P =50-P

E_P =(dQ/dP)*P/Q

(dQ/dP)=-1

When Q=84, P=50-0.5*84 =8

E_P = -1*8/84=-0.095

Revenue = P*Q= 84*8=672

So Price elasticity of demand = -0.095

Revenue = $672