Answer to Question #99785 in Macroeconomics for Vabole Donzo

Question #99785

For the inverse demand curve
P=60-0.5q, find the elasticity of demand at P=10

Expert's answer

"P = 60 - 0.5Q" , "Q = 120 - 2P","P = 10" ,

Q = 120 - 2*10 = 100.

elasticity of demand, Ed = a*P/Q,

Ed = -2*10/100 = -0.2,

Hence, demand is inelastic.

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