Question 8
MediumOriginal questionFor a demand function Qd = 100 − 10P, what is the price elasticity of demand at a price of ₹8?
Show the answer and explanation
CorrectNot quiteAnswer C
Correct answer: C
Explanation
At P = 8, Q = 100 − 80 = 20. The slope term ΔQ ÷ ΔP = 10 (ignoring the sign).
eₚ = (ΔQ ÷ ΔP) × (P ÷ Q) = 10 × 8 ÷ 20 = 4.
- Concept
- Elasticity on a linear demand curve
- Typical timeTypical
- 70 s
- Your timeYours
- —
Practise this chapter →
Ten questions from Price Elasticity of Demand, at your own pace.