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Show that the general linear demand function D(p) = a - bp, where a and b are positive real numbers, has a decreasing elasticity for

  1. Show that the general linear demand function D(p) = a - bp, where a and b are positive real numbers, has a decreasing elasticity for 0 p < a/b. Show that for the general linear demand function, E = -1 when p = a/2b.
  2. Not all demand functions are linear. Compute the elasticity for the exponential demand function D(p) =ae^-bp, where a and b are positive real numbers.
  3. Show that the demand function D(p) =a/p^b , where a and b are positive real numbers, has a constant elasticity for all positive prices.

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