The demand function for an item is given by d(x) = 100/ 0.01x 2 + 1 (20 ≤ x ≤ 50) where d(x) (measured in units of a thousand) is the quantity demanded per weak and x is the unit price in dollars.  (a) Find the rate of change in demand with respect to price. (b) How fast is the demand changing at price equal to 30 (x = 30)?

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter3: Demand Analysis
Section: Chapter Questions
Problem 1.8CE
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 The demand function for an item is given by

d(x) = 100/ 0.01x 2 + 1

(20 ≤ x ≤ 50)

where d(x) (measured in units of a thousand) is the quantity demanded per weak and x is the unit price in dollars. 

(a) Find the rate of change in demand with respect to price.

(b) How fast is the demand changing at price equal to 30 (x = 30)?

Expert Solution
Step 1

ELASTICITY of demand refers to the percentage change in quantity demanded due to percentage change in price .  

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