Question
The demand function of person A for a good is qA = 200 - p and the function of person B for the same good
The demand function of person A for a good is qA = 200 - p and the function of person B for the same good is qB = 90 - 4p.
A) At p, what is the price elasticity of demand for individuals A and what is it for individuals B? B) For which price for both groups is the price elasticity of demand equal to -1?
C) Draw the demand curve of people A in blue, the demand curve of people B in red and the market demand curve in pencil.
D) For which price the demand elasticity in relation to the price for market demand is equal to -1? At what price are revenues maximized?
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