Answer to Question #117494 in Economics for Ritchie

Question

1) Given the demand curve for a commodity as Q = 60 - 3P where Q is the quantity demanded and P the price per unit, determine the price elasticity of demand at P = 10.

2) The demand curve for a commodity X is given by Q_X=16 P_X^(-4) where Q_X is the quantity demanded and P_X is the price. What is the price elasticity of demand at P_X = 2 and Q_X = 1.

3) Derive an equation to calculate the income elasticity of demand at any point on the following function: Q = 40 -〖 Y〗^(-3/2) where Q is the quantity demanded and Y is the consumer’s income in Gh₵ ‘000.

4) The demand equation for a consumer is given by Q = 1/P^α . Show that price elasticity of demand is α.

Answer 1

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