Suppose the demand function is given by Q_x^d = 8P_x^0.5 P_y^0.25 M^0.12 H.Then the demand for good x is: A) inelastic. B) unitary. C) elastic. D) perfectly elastic.

Question

Quizplus · Accepted Answer

The demand elasticity is determined by the sum of the exponents of the price terms in the demand function. Here, the exponent of P_x is 0.5, which is less than 1, indicating that the demand is inelastic.

Suppose the Demand Function Is Given by Qxd = 8Px0

Suppose the Demand Function Is Given by Q_x^d = 8P_x⁰