Scenario 4.2:
Suppose that the demand for artichokes (Qa) is given as:
Qa = 200 - 4P
-Use the information in Scenario 4.2. What is the price elasticity of demand if the price of artichokes is $10?

Question

Quizplus · Accepted Answer

The price elasticity of demand (PED) is calculated using the formula: PED = (% change in quantity demanded) / (% change in price). Given the demand equation Qa = 200 - 4P, when P = $10, Qa = 200 - 4(10) = 160. To find the PED at P = $10, we differentiate Qa with respect to P, which gives -4. The PED formula can also be expressed as (dQ/dP)*(P/Q). Substituting the values, we get (-4)*(10/160) = -0.25.

Scenario 4.2: Suppose That the Demand for Artichokes (Qa) Is Given As