Answer to Question #260771 in Economics for Luna

Question

1. Given the demand function Q=15-3P, what is the quantity demanded if the price of the good is PHP 10.00

2. Given that

P↓0=2, P↓1=3

Q↓0=15, Q↓1=30

Solve the price elasticity of demand coefficien. What type of elasticity is it?

Answer 1

1. Q = 15 - 3×10 = -15 units, so at this price zero quantity will be demanded.

2. The price elasticity of demand coefficient is:

$Ed = \frac{30 - 15} {2-3} ×\frac{2+3} {30+15} = -5/3 = -1.67.$

So, the demand is elastic.