Suppose the inverse demand curve for a good is expressed as Q = 50 - 2p.If the good currently sells for $3,then the price elasticity of demand is
A) -3 ∗ (2/50).
B) -2 ∗ (50/3).
C) -2 ∗ (3/44).
D) -3 ∗ (44/2).

Question

Quizplus · Accepted Answer

The price elasticity of demand (PED) formula is (dQ/dP) * (P/Q). Given the inverse demand curve Q = 50 - 2P, when P = $3, Q = 50 - 2*3 = 44. The derivative of Q with respect to P (dQ/dP) is -2. Substituting these values into the PED formula gives -2 * (3/44), which matches option C.

Suppose the Inverse Demand Curve for a Good Is Expressed