Refer to the following figure:

-When price is $5 and quantity demanded is 3,000, what is the point elasticity of demand?
A) -3
B) -1/3
C) -1
D) -5
E) -2/3

Question

Refer to the following figure:
 
-When price is $5 and quantity demanded is 3,000, what is the point elasticity of demand?
A) -3 
B) -1/3 
C) -1 
D) -5 
E) -2/3

Quizplus · Accepted Answer

The point elasticity of demand is calculated using the formula: (dQ/dP) * (P/Q). Assuming a linear demand curve, the slope (dQ/dP) can be estimated as the change in quantity over the change in price. Here, the elasticity is calculated as (-1/3) * (5/3000) = -1/3.

Refer to the Following Figure