Math Problem Statement
The demand function for a certain make of exercise bicycle sold exclusively through cable television is p = squreroot 6 − 0.02x (0 ≤ x ≤ 300) where p is the unit price in hundreds of dollars and x is the quantity demanded/week. Compute the elasticity of demand E(p). E(p) =
Solution
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Math Problem Analysis
Mathematical Concepts
Elasticity of Demand
Differentiation
Algebra
Formulas
E(p) = (p/x) * (dx/dp)
Demand function: p = sqrt(6) − 0.02x
Rearranged for x: x = (sqrt(6) - p) / 0.02
Derivative: dx/dp = -50
Theorems
Elasticity of demand
Suitable Grade Level
College-level Economics or Advanced High School Calculus
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