Business Calculus Question

Question

Given the demand equation p=450/q+50 find the point elasticity at q=250

Answer 1

q = 450/(p - 50); dq/dp = - 450(p - 50)²;

Elasticity of demand E(p) = -p(dq/dp)/q =(p·450)/(p - 50)²(p - 50)/450 = p/(p - 50);

p = 450/250 + 50 = 51.8

So, E(1.8) = 51.8/(51.8 - 50) = 28.78 > 1