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?© BrainMass Inc. brainmass.com June 23, 2018, 4:04 pm ad1c9bdddf
Q = (120 - P)/0.5 = 240 - 2P
dQ/dP = -2
Price Elasticity of Demand = ...
Neat and step-by-step soltuion is provided.