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Suppose the demand equation​ is: Upper Q equals 120 minus 1.25 p. What is the price elasticity of demand if the price is ​$60 per unit and output is 45 ​units? The price elasticity of demand is nothing. ​(Enter a numeric response using a real number rounded to two decimal​ places.)

Respuesta :

Answer:

-1.67

Explanation:

Given that,

Q = 120 - 1.25p

Initial price, p = $60 per unit

Initial quantity, q = 45 units

Q = 120 - 1.25p

Now, differentiating Q with respect to price,

dQ/dp = -1.25

Therefore,

Price elasticity of demand:

= (dQ/dp) × (p ÷ q)

= -1.25 × (60 ÷ 45)

= -1.25 × 1.33

= -1.67

This means that the demand is elastic.

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