Suppose a good has a demand curve given by Q = 20 - 8xP.What is the price elasticity of demand if the price is $2?
A) -4
B) -8
C) 1/2
D) -1/2

Name: Suppose a good has a demand curve given by Q = 20 - 8xP.What is the price elasticity of demand if the price is $2? A) -4 B) -8 C) 1/2 D) -1/2
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Question

Quizplus · Accepted Answer

The price elasticity of demand (PED) is calculated using the formula PED = (dQ/dP) * (P/Q). Given Q = 20 - 8P, dQ/dP = -8. At P = $2, Q = 20 - 8*2 = 4. Thus, PED = (-8) * (2/4) = -4.

Suppose a Good Has a Demand Curve Given by Q