The demand function for Alicia’s oven mitts is given by q = -8p + 80 (q is the number of oven mitts, p is the price in dollars). Find the elasticity of demand when p = $7.50.

Answer 1

q=-8p +80

dq/dp = -8

elasticity = (dq/dp)(p/q)

when p=7.5, q=-8(7.5)+80= -60+80= 20

elasticity = (dQ/Q)/(dP/P) = (dQ/dP)/(P/Q)

= -8(7.5/20) = -3

but elasticity usually ignores the negative sign,

so elasticity = +3

with luck there's no arithmetic mistake above