Assume the demand function for a particular good can be written as P = 150 - 6Q.When P = 12,the point elasticity of demand equals 2.08.

Question

Quizplus · Accepted Answer

The point elasticity of demand (PED) at a specific price can be calculated using the formula PED = (dQ/dP) * (P/Q), where dQ/dP is the derivative of the demand function with respect to price, P is the price, and Q is the quantity. For the given demand function P = 150 - 6Q, when P = 12, we first solve for Q: 12 = 150 - 6Q, which gives Q = 23. Then, the derivative dQ/dP = -1/6 (since dP/dQ = -6, the inverse is -1/6 for dQ/dP). Plugging these values into the PED formula does not yield 2.08, indicating the initial statement is false.

Assume the Demand Function for a Particular Good Can Be