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# Price Elasticity watch

1. Hello,

Could someone please let me know if this equation looks ok.

Find the price elasticity of demand when P=3 for each of the following demand functions

a) P = 12 - 0.2Q

3 = 12 - 0.2Q

0.2Q = 12 - 3

0.2Q = 9

Q = 9/0.2

Q = 45

b) Q = (100/P)^4

dQ/dP = -30000P^-5

elasticity =

-30000P^-5 x (P/(10000P^-4))

= -30000P^-5 x (P^4/10000)

= -1

Cheers
2. This does not look right to me.

3. ok. So is it dQ/dP = -4000P^-5?
4. (Original post by tv4me)
ok. So is it dQ/dP = -4000P^-5?
5. (Original post by tv4me)
ok. So is it dQ/dP = -4000P^-5?
No

I hope this is correct

6. Thanks for your help. Do i just leave that as the answer or am i meant to work it out because i get a massive number?

Also, does question A look ok?

Thank you
7. (Original post by tv4me)
Thanks for your help. Do i just leave that as the answer or am i meant to work it out because i get a massive number?

Also, does question A look ok?

Thank you
I spotted one error and hope I have corrected it. I am not an expert, there may be other things wrong with your solutions.
8. (Original post by tv4me)
Thanks for your help. Do i just leave that as the answer or am i meant to work it out because i get a massive number?

Also, does question A look ok?

Thank you
No A is not correct.

The question says " Find the Price Elasticity of Demand" you have found Q only.

9. On a slightly tangential note, does it bother anybody that it is assumed price and demand of whatever good/service is being discussed is assumed to be continuous and differentiable?
10. no.

edit: Actually, I have no idea what you're on about.
11. (Original post by maths-enthusiast)
On a slightly tangential note, does it bother anybody that it is assumed price and demand of whatever good/service is being discussed is assumed to be continuous and differentiable?
Because it lets us use calculus to analyse problems. I imagine the discretised problem is harder to solve...
12. My question was different.

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