Compute point elasticities at prices

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Reference no: EM1360775

The demand function for a cola-type soft drink in general is Q = 20 - 2P, where Q stands for quantity and P stands for price.

a. Compute point elasticities at prices of 5 and 9. Is the demand curve elastic or inelastic at these points?

b. Calculate arc elasticity at the interval between P = 5 and P = 6.

c. At which price would a change in price and quantity result in approximately no change in total revenue? Why?

Reference no: EM1360775

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