The demand for drangles is given by D(p)=(p+1)−2, where p is the price of drangles. If the price of drangles is $19, then the price elasticity of demand for drangles is

Question

The demand for drangles is given by D(p)=(p+1)−2, where p is the price of drangles. If the price of drangles is $19, then the price elasticity of demand for drangles is

BlackTom AI · Accepted Answer

We start by parsing the demand function and computing elasticity step by step. The demand function is D(p) = (p+1)^{-2}, where p is the price.

Option 1: -3.80. To assess this, we would need ε = (dD/dp) * (p/D). Using the derivative dD/dp = -2(p+1)^{-3} and D = (p+1)^{-2}, we get ε = (-2(p+1)^{-3}) * (p) / (p+1)^{-2} = -2p/(p+1). Substituting p = 19 gives ε = -2*19/20 = -38/20 = -1.9, not -3.80. Therefore, this option is incorrect.

Option 2: -1.90. This aligns with the derived formula ε = -2p/(p+1). Plugging p = 19 yields ε = -38/20 = -1.9, which matches -1.90 when rounded to two decimals. This option is consistent with the calculation.

Option 3: -5.70. This would require a different relationship or a mistaken derivative substitution. Given the correct formula ε = -2p/(p+1) and p = 19, we cannot obtain -5.70, so this option is incorrect.

Option 4: -4.20. Similar to Option 3, obtaining -4.20 would demand a different elasticity expression or value. With the proper computation, this value does not appear, making this option incorrect.

Option 5: -7.60. This is far from the computed elasticity using the given function and price. It does not result from ε = -2p/(p+1) at p = 19, so this option is incorrect.

In summary, the correct approach uses D(p) = (p+1)^{-2} and ε = -2p/(p+1); evaluating at p = 19 gives ε = -1.9, which corresponds to the second option.

ECON5001 Microeconomic Theory Quiz 3 (available 6 May, due 16 May)

The demand for drangles is given by D(p)=(p+1)−2, where p is the price of drangles. If the price of drangles is $19, then the price elasticity of demand for drangles is

View Explanation

Log in for full answers

Similar Questions

In a consumer society, many adults channel creativity into buying things

Economic stress and unpredictable times have resulted in a booming industry for self-help products

People born without creativity never can develop it

A product has a selling price of $20, a contribution margin ratio of 40% and fixed cost of $120,000. To make a profit of $30,000. The number of units that must be sold is: Type the number without $ and a comma. Eg: 20000

Which of the following statement regarding cost is correct:

Under the assumptions used in cost-volume-profit analysis, as the activity increases:

The CVP and break-even analysis are supported by a range of important assumptions. Which of the following is not an assumption of the CVP:

The break-even point is that at which:

More Practical Tools for Students Powered by AI Study Helper

Homework AI Solver

Stylized AI Paper Writer

Plagiarism Checker Assistant

Citation AI Academic Writing Tool

In-Class Translation Assistant

AI Note Generator

AI Quiz Answers

Past Exam Questions from University Test Bank

Smart Practice Assistant

Adaptive Practice

Making Your Study Simpler