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    Economics - Demand curve

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    Suppose a firm's demand curve is given by P=120-0.5Q. Find the (value of) price elasticity of demand (point elasticity) for the demand curve when the price is $100. Is demand elastic or inelastic?

    Once it's determined to be elastic or inelastic, how do you come to that conclusion?

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    Solution Preview

    Q = (120 - P)/0.5 = 240 - 2P

    dQ/dP = -2

    Price Elasticity of Demand = ...

    Solution Summary

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