Question

a good's demand is given by: p = 570 - 3q. at p = 123, the point price elasticity is:enter as a value (round to two decimal places if necessary).

Answer 1

The price elasticity of demand is a measure of how responsive the quantity demanded of a good is to changes in its price. To find the point price elasticity at p = 123,

Step-by-step explanation:

The price elasticity of demand is a measure of how responsive the quantity demanded of a good is to changes in its price. It is calculated by dividing the percentage change in quantity demanded by the percentage change in price. In this case, the price-demand equation is given as p = 570 - 3q.

To find the point price elasticity at p = 123, we need to calculate the percentage change in quantity demanded and the percentage change in price.calculate the percentage change in quantity demanded and the percentage change in price and divide them.

Using the formula:

% change in quantity = [(new quantity - old quantity) / (average quantity)] * 100

% change in price = [(new price - old price) / (average price)] * 100

Substituting the given values into the formulas, we have:

% change in quantity = [(123 - 190) / ((123 + 190) / 2)] * 100

% change in price = [(190 - 200) / ((190 + 200) / 2)] * 100

Calculate the percentages and divide the % change in quantity by the % change in price to get the point price elasticity.