Asked by Grace Davis on Jul 11, 2024
Verified
The demand for telephone wire can be expressed as:
Q = 6000 - 1,500P,
where Q represents units, in pounds per day, and P represents price, in dollars per pound. Determine the price elasticity of demand at per pound.
Price Elasticity
A measure reflecting the impact of price variations on the demand for a particular product.
Telephone Wire
The physical medium through which electrical signals for voice communication are transmitted over distances, traditionally made of copper.
- Understand the concept of price elasticity of demand and how to calculate it for different products.
Verified Answer
BS
Brandon SauvalJul 14, 2024
Final Answer :
We use the point price elasticity concept. First, we calculate Q at Q = 6000 - 1,500(2) = 3,000 pounds per day. = ∙ = (-1500) = -1
This indicates a unitary elasticity at this price.
This indicates a unitary elasticity at this price.
Learning Objectives
- Understand the concept of price elasticity of demand and how to calculate it for different products.