Concept explainers
Elasticity of Software The Valve Corporation, a software entertainment company, recently ran a holiday sale on its popular Steam software program. Using data collected from the sale, it is possible to estimate the demand corresponding to various discounts in the price of the software. Assuming that the original price was $40, the demand for the software can be estimated by the function
where p is the price and q is the demand. Calculate and interpret the elasticity of demand. Source: codinghorror.com.
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