Final answer:
To find the elasticity of demand for a product, you need to differentiate the demand function with respect to price, then multiply this derivative by the ratio of price to quantity at the given price level, and round to two decimal places.
Step-by-step explanation:
To find the elasticity of demand for a product with the demand function q = 2440p^-0.8 at a price of $12, we can use the formula for elasticity which is the derivative of the quantity with respect to price times the price divided by the quantity. The formula looks like this: elasticity (ε) = (dq/dp) * (p/q). Given the demand function q = 2440p^-0.8, we first need to find the derivative of q with respect to p, which is dq/dp. After differentiating, we will substitute p = 12 to evaluate the elasticity at the given price level.
The first step is to differentiate the demand function:
dq/dp = -0.8 * 2440p^-1.8
Now we substitute p = 12 and find q:
q = 2440(12)^-0.8
After finding q, we can calculate the elasticity:
ε = (-0.8 * 2440 * 12^-1.8) * (12/q)
Finally, we round the result to two decimal places to find the elasticity of demand.
The specific calculations and exact numeric result are not shown here, but following the above steps will give the correct elasticity value. If the value of elasticity is less than 1, the demand curve is considered inelastic.