Question
========
Consider the following inverse demand function:
$p(x) = 50 - 0.5 \cdot x$
for the price $p$ given the demanded quantity $x$.
What is the price elastiticy of demand at a price of
$p = 5$?
Answerlist
----------
* $-0.11$
* $-0.15$
* $-0.25$
* $-0.23$
* None of the others.
Solution
========
First, we obtain the demand function by inverting the
inverse demand function:
$x = D(p) = (50 - p)/0.5 = 100 - 2 \cdot p$.
Then, at $p = 5$ the price elasticity of demand is
$$
\frac{D'(p)}{D(p)} p = \frac{-2}{90} 5 = -0.111111.
$$
Answerlist
----------
* True
* False
* False
* False
* False
Meta-information
================
extype: schoice
exsolution: 10000
exname: price elasticity of demand
exshuffle: TRUE