A firm's demand curve is P = 1 - 2Q. The firm has a current price of R1000 and it sells 100 units per day. What is the firm's price elasticity of demand?
P = 1 - 2Q, so Q = 0.5 - 0.5P.
The firms price elasticity of demand is:
"Ed=\u22120.5\u00d71000\/100=\u22125."
So, the demand is elastic at this price.
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