Economics Question about Elasticity.

[simms]

http://courseware.utoronto.ca/web-ct/co..._2005/1.%20S%26D/1.2%20Elasticity.htm#

Where the hell do they get those fractions for elasticity?
IE Only. FF doesn't work with this..

QD = 500 - 50P
QS = 100P - 100


Elasticity is calculated as point elasticity when using supply and demand functions. For the point measure DQ/DP is given by the slope of the relevant curve. At P = $4, the elasticity of demand is equal to 2/3 and the elasticity of supply is equal to 4/3.

 

[dbk]

can't log in

 

[simms]

Thanks, but I just quoted the question in my OP. 🙂

 

[skim milk]

just plug in $4 for P in each equation

so QD=300 and QS=300

then the equation of elasticity is p/q or something like that

which would make it 50(4)/300 = 2/3
and 100(4)/300 = 4/3

 

[simms]

Originally posted by: fritolays
just plug in $4 for P in each equation

so QD=300 and QS=300

then the equation of elasticity is p/q or something like that

which would make it 50(4)/300 = 2/3
and 100(4)/300 = 4/3

Thanks, so that means when I solve for P, I just take the value that is multiplied by the price, and then divide it by the number I get for QS?