09b.elasticity - MAC 2233/001-006 Business Calculus Fall...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: MAC 2233/001-006 Business Calculus, Fall 2011 CRN: 81700–81702, 81705, 81716, 81715 Name: Two points . Professor : Stephen Suen Section: Peer Leaders : Hana Aboul-Hosn, Toni Jung, Renan Mendonca 9. The price elasticity of demand . The price elasticity of demand measures the effect of price on demand. It is defined as η = p x · 1 dp/dx = p x · dx dp ≈ Δ x/x Δ p/p = relative (percentage) change in demand relative (percentage) change in price . Note that for products that satisfy the Law of Demand , (that is, higher price results in lower demand, and lower price results in higher demand,) η is always negative (because dp dx is always negative). Example . (The price elasticity of demand.) Consider the demand function p = 100e- . 01 x , x ≥ , where p is price in dollars, and x is quantity demanded of a certain product. (a) Find a formula for η as function of x . (b) Suppose that current demand is x = 120, find p and evaluate η ....
View Full Document

This note was uploaded on 01/02/2012 for the course MAC 2233 taught by Professor Danielyan during the Fall '08 term at University of South Florida.

Page1 / 2

09b.elasticity - MAC 2233/001-006 Business Calculus Fall...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online