Consider the demand curve D(p) = 10 – 3p. What is the elasticity … - Vidyadip

Question

Consider the demand curve $D(p) = 10 – 3p$. What is the elasticity at price $\frac{5}{3}?$

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Answer

$D(p) = 10 – 3p \text{b}=\triangle\text{Q}/\triangle\text{P}=3$
$p = 5/3$ or $D(5/3) = 10 – 3 × 5/3 Q = 10 – 5 = 5^{\text{e}}\text{d}=\frac{\triangle\text{Q}}{\triangle\text{P}}\times\frac{\text{P}}{\text{Q}}$
$= -3 \times (5/3)/5$
$^ed = –1$
i.e., the elasticity of demand at price $p = 5/3$ unitary elastic.

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