Suppose the demand for good X is $$Q = 500 P ^ { - 1 }$$ . This demand curve has a ________ (constant, variable) elasticity of demand equal to ________.
A) variable; -0.5
B) constant;-0.2
C) constant; -1
D) variable;-2

Question

Quizplus · Accepted Answer

The demand curve $Q = 500 P^{-1}$ has a constant elasticity of demand equal to -1 because the exponent of P in the demand equation is -1, indicating unitary elasticity.

Suppose the Demand for Good X Is Q=500P−1Q = 500 P ^ { - 1 }Q=500P−1

Suppose the Demand for Good X Is $Q = 500 P ^ { - 1 }$