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The consumer demand equation for tissues is given by q = (94 − p)2, where p is the price per case of tissues and q is the demand in weekly sales. (a) Determine the price elasticity of demand E when the price is set at $28.

Respuesta :

Answer:

E=0.848

Explanation:

Given that

q= (94-p)²

where p is the price per case of tissues and q is the demand in weekly sales

As we know that price elasticity of demand given as

[tex]E=-\dfrac{dq}{dp}.\dfrac{p}{q}[/tex]

q= (94-p)²

[tex]\dfrac{dq}{dp}=- 2 (94-p)[/tex]

[tex]E=2 (94-p)\dfrac{p}{(94-p)^2}.[/tex]

When p =  $28

[tex]E=2 \dfrac{p}{(94-p)}.[/tex]

[tex]E=2\times \dfrac{28}{(94-28)}.[/tex]

E=0.848

Lanuel

The price elasticity of demand is equal to 0.85%.

Given the following data:

  • Consumer demand equation = [tex]q = (94 - p)^2[/tex]
  • Price = $28.

How to calculate the price elasticity of demand.

Mathematically, the price elasticity of demand is given by this formula:

[tex]E=-\frac{dq}{dp} (\frac{p}{q} )[/tex]

Where:

  • p is the price.
  • q is the quantity of demand.
  • E is the price elasticity of demand.

But, [tex]\frac{dq}{dp} =-2(94-p)[/tex]

Substituting the given parameters into the formula, we have;

[tex]E = -[-2(94-28) \times \frac{28}{(94 - 28)^2} ]\\\\E = 2 \times \frac{28}{66} \\\\E = 2 \times 0.4242[/tex]

E = 0.85%

Read more on price elasticity here: https://brainly.com/question/24384825

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