Demand function \(x\), for a certain commodity is given as \(x=200-4p\), where \(p\) is the unit price. Find(a) elasticity of demand as a function of \(p\).(b) elasticity of demand when \(p=10\). Interpret your result.Solution:(a) Here, \(x=200-4p\)\…
Q.3 (C) (i) Demand function \(x\), for a certain commodity is given as \(x=200-4p\), where \(p\) is the unit price. Find
(a) elasticity of demand as a function of \(p\).
(b) elasticity of demand when \(p=10\). Interpret your result.
Solution:
(a) Here, \(x=200-4p\)
\(\therefore\) Elasticity of demand is
\(\eta=\frac{-p}{x}\cdot\)[ ]
\(=\frac{-p}{(200-4p)}\)[ ]
\(\therefore\eta=\frac{p}{50-p}\)
(b) When \(p=10\)
\(\eta=\frac{10}{[\ \ ]}\)
\(=0.25\)
\(\therefore\) Demand is [ ] for \(p=10\)