If the inverse demand curve for a good is given by P = 100 - 4Q, the price elasticity of demand is elastic at a price of _____ and inelastic at a price of _____.
A) $40; $60
B) $60; $50
C) $55; $35
D) $35; $30

Question

Quizplus · Accepted Answer

The price elasticity of demand is elastic when the absolute value of elasticity is greater than 1 and inelastic when it is less than 1. At P = $55, the elasticity is greater than 1 (elastic), and at P = $35, it is less than 1 (inelastic).

If the Inverse Demand Curve for a Good Is Given