Question

Given a demand function Q=f(P), the own price elasticity of demand is defined as ε=(dQ/dP).(P/Q)What is the own price elasticity of demand ε (a) for the linear demand function Q=100−5P when P=10 .

Answer 1

The own price elasticity of demand is -1 when P = 10 for the given linear demand function.

Step-by-step explanation:

The own price elasticity of demand, denoted by ε, is calculated using the formula ε = (dQ/dP) * (P/Q).

Given the demand function Q = 100 - 5P, we can first find dQ/dP by taking the derivative of Q with respect to P: dQ/dP = -5.

Next, we substitute the given values P = 10 and Q = 100 - 5P into the formula: ε = (-5) * (10 / (100 - 5 * 10)).

Simplifying the expression, we get ε = -1.

Therefore, the own price elasticity of demand when P = 10 for the linear demand function Q = 100 - 5P is -1.