Reference no: EM132431381

1. Show that the general linear demand function D(p) = a - bp, where a and b are positive real numbers, has a decreasing elasticity for 0 ≤ p < a/b. Show that for the general linear demand function, E = -1 when p = a/2b. 
2. Not all demand functions are linear. Compute the elasticity for the exponential demand function D(p) =ae^-bp, where a and b are positive real numbers. 
3.  Show that the demand function D(p) =a/p^b , where a and b are positive real numbers, has a constant elasticity for all positive prices.