Finite Math and Applied Calculus (6th Edition)

Published by Brooks Cole
ISBN 10: 1133607705
ISBN 13: 978-1-13360-770-0

Chapter 12 - Section 12.6 - Elasticity - Exercises - Page 931: 3a

Answer

$E=0.857$ Here, $E<1$ meaning, that the demand is inelastic to the price change.

Work Step by Step

If the demand function is $q=(100-p)^2$ and $p=\$30$ The elasticity can be calculated as: $E=-\frac{dq}{dp}\times\frac{p}{q}$ The derivative of the demand function is :$\frac{dq}{dp}=-2(100-p)$ Therefore at the given price $E=-(-2(100-30))\times\frac{30}{(100-30)^2}=0.857$ Here, $E<1$ meaning, that the demand is inelastic to the price change.
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