The demand for a monopolist's output is , where p is the price it charges. At a price of $3, the elasticity of demand for the monopolist's output is

Question

The demand for a monopolist's output is  , where p is the price it charges. At a price of $3, the elasticity of demand for the monopolist's output is

Quizplus · Accepted Answer

The formula for elasticity of demand is:

Elasticity = (% change in quantity demanded / % change in price) * (p / q)

To calculate the elasticity at a price of $3, we need to know the price and quantity demanded at another point to calculate the percentage changes. Let's assume that the initial price and quantity demanded are $4 and 10, respectively:

Elasticity = ((10-6)/(6/10)) * (3/6) = -1.20

Therefore, the elasticity of demand at a price of $3 is -1.20.

The Demand for a Monopolist's Output Is , Where