Suppose the demand function for a commodity is given as Q = 1000 – 10P
Right Answer is: C
• Point elasticity is the price elasticity of demand at a specific point on the demand curve.
• Price Elasticity of Demand= % Change in Quantity/% Change in Price
• If the demand function for a commodity is given as Q = 1000 – 10P where ‘Q’ denotes quantity of demand and ‘P’ denotes price of the commodity.
• The Point Price elasticity of demand of price Rs 20 will be -0.25.