posted by John on .
I have to determine the own price elasticity of demand with the following info given 1n Qdx = 3 - 0.5 1n Px - 2.5 in Py + 1nM + 2 1n A where Px=$10, Py = $4, M = $20,000 and A = $ 250. Where do I begin?
Begin by defining elasticity in mathematical terms of some derivative. Then recognize that what you call "1n" is probably the natural log "ln".
The definition of price elasticity of demand is -d(lnQ)/d(lnP). Q represents demand
You have not defined M, Px and Py. I'm afraid that's as far as I can go with your question.
I would like to make a arc elasticity chart. We have a team project and would like to add in a arc elasticity demand to the paper.