Question

If the demand equation for a certain commodity is given by the equation: 550p + q = 86,000 where p is the price per unit; at what price is there unitary elasticity? Round your answer off to two decimal places. p =_____________?

Answer 1

The function can be written as . The price elasticity of demand would be as below.

or

or

or

or .

This would be unitary, ie equal to -1 (since the elasticity of demand is always negative), where

or

or

or .

Hence, at price 860/11 dollar or $78.18, the demand elasticity would be unitary.