If demand function for a product is Qd = 30 – 4P, and the pr…
Source: JAMB · 2023
If demand function for a product is Qd = 30 – 4P, and the price and quantity of products is 4 and 14 respectively. What is the price elasticity of demand for the product?
Explanation
From Qd = 30 − 4P, the slope dQ/dP is −4.
Elasticity = |dQ/dP| × P/Q = 4 × 4 ÷ 14 = 16 ÷ 14 ≈ 1.14.
Since it is above 1, demand is elastic.
Was this explanation helpful?
Something wrong or missing? Tell us — we read every report and fix issues fast.