JAMB - Economics (2023 - No. 46)
If demand function for a product is Qd = 30 - 4P, and the price and quantity of products is 4 and 14 respectively. What is the price elasticity of demand for the product?
1.14
7.1
14.1
1.7
Explicació
Q = 14, P = 4
Qd = 30 - 4p
∆q/∆p = - 4
Ed = \(\frac{∆q}{∆p}\times\frac{p}{q}\)
= - 4 x 4/14
= Ed = -1.14
since price elasticity is positive, then Ed = 1.14