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Suppose the demand is Qd = 12 - 5P. Find Qd and P when the priceelasticity of demand, ed = 5.?

by Guest58890  |  earlier

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  1. Price elasticity of demand for normal goods is negative so E= 5 =-5

    E=PδQ/QδP= -5

    δQ/δP=(Qd)'= -5

    -5Q/P= -5

    Q=P

    P=12-5P

    6P=12

    P=12/6=2

    Q=12-5*2=12-10=2

    Answer: at E=5 Q=2; P=2

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