Anonymous
Anonymous asked in Science & MathematicsMathematics · 1 month ago

The price elasticity of demand for a linear demand function, D(p)=b−ap is given by Q=E(p)=(ap)/(b-ap)?

Rewrite the formula to express price as a function of elasticity

p=g(Q)=?

Update:

b)  What is the long-term behavior of g?

As elasticity increases without bound, the price at which this elasticity occurs approaches

1 Answer

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  • Bryce
    Lv 7
    1 month ago

    E= ap/(b - ap)

    Eb - Eap= ap

    Eap + ap= Eb

    p(Ea + a)= Eb

    p= g(Q)= Eb/(Ea + a)= Eb/[a(E + 1)]

    As E→∞, p→b/a

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