The demand function of a good is given by Q = 1000/P 2 (a) Calculate the price

Question:

The demand function of a good is given by
Q = 1000/P²

(a) Calculate the price elasticity of demand at P = 5 and hence estimate the percentage change in demand when P increases by 2%.

(b) Comment on the accuracy of your estimate in part (a) by calculating the exact percentage change in demand when P increases from 5 to 5.1.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Mathematics for Economics and Business

ISBN: 978-1292191669

9th edition

Authors: Ian Jacques

See More Books

Question Posted: Apr 18, 2019 09:27 AM

See More Questions

The demand function of a good is Q = 100 P + 2Y + 1/2A where Q, P, Y and A denote quantity demanded, price, income and advertising expenditure, respectively. (a) Calculate the demand when P = 10, Y...
(a) Find the elasticity of demand in terms of Q for the demand function, P = 20 0.05Q. (b) For what value of Q is demand unit elastic? (c) Find an expression for MR and verify that MR = 0 when...
A firms short-run production function is given by Q = 30L 2 0.5L 3 Find the value of L which maximises APL and verify that MP L = AP L at this point.
Which of the following statements about Visa credit card sales is incorrect? (a) The credit card issuer makes the credit investigation of the customer. (b) The retailer is not involved in the...
One type of ultrasonic humidifier uses a vibrating piezoelectric crystal actuator to produce tiny water droplets in the air. If 20 lbm/min of air at 70 8F enters the humidifier with a relative...
The following article extract refers to the goodwill glob and implies that it produces data that lack serviceability. Clarke and Dean (2011, p. 63) outline that there will come a time when challenges...
Identify the main performance initiatives in your organisation.? lo1
Refer to Problem 16-1 and assume that the company had $3 million in assets at the end of 2008. However, now assume that the company pays no dividends. Under these assumptions, what additional funds...
Question 7 In the PROJECTS Module, which of the following is not true for the Allocation of costs: by a set amount. by employee hours. O by budget Nollars
Enhance the Treasury Yield Rates database file to perform a database query that finds the rate associated with any date and term.
(a) If an airline increases prices for business class flights by 8%, demand falls by about 2.5%. Estimate the elasticity of demand. Is demand elastic, inelastic or unit elastic? (b) Explain whether...
Consider the supply equation Q = 4 + 0.1P 2 (a) Write down an expression for dQ/dP. (b) Show that the supply equation can be rearranged as P = (10Q - 40) Differentiate this to find an expression for...
Helium gas expands from 125 kPa, 350 K and 0.25 m3 to 100 kPa in a polytropic process with n = 1.667. How much heat transfer is involved?
Define Immunity. How do you classify Immunity? Add a note on the various functions of T lymphocytes and B lymphocytes.
1. What is Hemophilia? Mention its types.
Write the difference between Dwarfism and Gigantism.
What are the different elements of a query that can be processed in parallel?
Express these numbers in standard notation. a. 2.87 10-8 b. 1.78 1011 c. 1.381 10-23
In Problem write a brief verbal description of the relationship between the graph of the indicated function and the graph of y = x 2 . g(x) = x 2 - 2x - 5
For Problem rewrite in equivalent logarithmic form. 8 = 4 3/2
In Problem write a brief verbal description of the relationship between the graph of the indicated function and the graph of y = x 2 . f(x) = x 2 - 4x + 3
Ray Company provided the following excerpts from its Production Department's flexible budget performance report. Required: Complete the Production Department's Flexible Budget Performance Report....
Problem 1 5 - 5 ( Algo ) Lessee; operating lease; advance payment; leasehold improvement [ L 0 1 5 - 4 ] On January 1 , 2 0 2 4 , Winn Heat Transfer leased office space under a three - year operating...
Zafra and Stephanie formed an equal profit- sharing O&S Partnership during the current year, with Zafra contributing $100,000 in cash and Stephanie contributing land (basis of $60,000, fair market...

The demand function of a good is given by Q = 1000/P 2 (a) Calculate the price

Question:

Step by Step Answer:

a dQ 2000 dP p do At P 5 Q 40 and 16 dp 5 ...View the full answer

Mathematics for Economics and Business

Students also viewed these Mathematics questions