Market demand is given as Q_D= 70 - P.Market supply is given as Q_S= 3P.If price increases from $30 to $34,what is the price elasticity of demand

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First, we need to find the quantity demanded at each price point: - At P=$30: Q_D= 70 - 30 = 40 - At P=$34: Q_D= 70 - 34 = 36 Next, we can use the midpoint formula to calculate the price elasticity of demand: Elasticity = ((Q2-Q1)/((Q2+Q1)/2))/((P2-P1)/((P2+P1)/2)) Elasticity = ((36-40)/((36+40)/2))/((34-30)/((34+30)/2)) Elasticity = -0.9 However, price elasticity is typically reported as a positive value, so we take the absolute value: Elasticity = 0.9 Therefore, the answer is (C) 1.1 as it is the closest option to 0.9.

Market Demand Is Given as QD = 70 - P

Market Demand Is Given as Q_D= 70 - P