When P 10020 and Q 5 the point price elasticity of demand is

When P 100-20 and Q 5, the point price elasticity of demand is Enter as a value 8. If the sample coefficient of determination (R\') is 0.25, this means that 25 percent of the varistion in the dependent variable is explained by the regression. b. 25 percent of the variation in the independent variable is explained by the regression. c. 75 percent of the variation in the dependent variable is explained by the regression. d. 75 percent of the variation in the independent variable is explained by the regression. 9. The Return of Detroit City: Enpar manufactures engine parts for Ford using steel as an input. Enpar operates two plants, one in Detroit, MI and one in Greenville, SC. The production functions for the two Enpar plants are: 20 So-0.25 S2 Qs = 4056\" 0.5 s62 Detroit: 0.2G Greenville: where QD and QG are the outputs of engine parts (in units) from the Detroit and Grenville plants respectively. SD and SG are the amounts of steel for the two plants. The firm has 44 units of steel available. How much steel should be sent to Detroit? Enter as a value.

Solution

Ans7) elasticity of demand = dq/dp*p/q

P = 100 - 2Q so 2Q = 100 - P

implies Q = 50 - P/2. Now differentiate Q with respect to P.

dQ/dP = -1/2 and Q = 5

elasticity of demand = -1/2*(100 - 2Q)/Q = -1/2*90/5 = -9