If demand function for a product is Qd = 30 – 4P, and the price and quantity of products is 4 and 14 respectively. What is the price elasticity of demand for the product?
-
1.14
- 7.1
- 14.1
- 1.7
The correct answer is: A
Explanation
Q = 14, P = 4
Qd = 30 - 4p
∆q/∆p = - 4
Ed = \(\frac{∆q}{∆p}\times\frac{p}{q}\)
= - 4 x 4/14
= Ed = -1.14
since price elasticity is positive, then Ed = 1.14