Find the price elasticity of demand. The demand function for the product is p=40-2x
To find the price elasticity of demand for a product, we need to use the formula:
Elasticity (E) = (Percentage change in Quantity Demanded / Percentage change in Price)
First, let's understand the variables in the demand function: p represents the price of the product, and x represents the quantity demanded. The demand function is given as p = 40 - 2x.
To calculate the price elasticity of demand, we need to find the percentage change in quantity demanded and the percentage change in price.
Percentage change in quantity demanded can be calculated using the formula:
Percentage change in Quantity Demanded = [(Q2 - Q1) / ((Q1 + Q2) / 2)] * 100
Given the demand function p = 40 - 2x, we can express x in terms of p:
x = (40 - p) / 2
To calculate the percentage change in price, we can use the same formula as above:
Percentage change in Price = [(P2 - P1) / ((P1 + P2) / 2)] * 100
However, since the demand function does not provide us with P2 and P1, we need more information on how the price has changed.
Please provide the initial and final prices so we can calculate the price elasticity of demand accurately.