Demand curve of a software development firm digisign is qd= -16p^2 -4p + 250 .Carry out analysis

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  1. math_celebrity

    math_celebrity Administrator Staff Member

    Demand curve of a software development firm digisign is
    qd= -16p^2 -4p + 250 .Carry out analysis of demand function and find out elasticity of demand Ed At p=25.
    Draw pertinent conclusions .

    qd(25) = -16*(25^2) - 4(25) + 250
    qd(25) = -10000 - 100 + 250
    qd(25) = -9850

    So p = 25 and q = -9850

    Ed = dp/dq
    Ed = -13p -4

    Elasticity of Demand is found at:
    Ed = p/q * dp/dq
    Ed = 25/-9850 * (-13(25) - 4)
    Ed = 25/-9850 * -329
    Ed = 0.835
     

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