Question

Given Qd = 60 – 15P + P², the (point) price elasticity of demand at a price of 5.

Answer 1

Qd = 60 – 15P + P².

At a P = 5:

Qd = 60 - 15×5 + 25 = 10.

Q'd = -15 + 2P = -15 + 2×5 = -5.

The (point) price elasticity of demand is: $Ed = -5×5/10 = -2.5.$

So, the demand is elastic.