ID:MC200405248

Solution 1:
Price = 4 $
Price Elasticity of demand ?
Quadratic Equation:
Qd = 75-20p+2p2
Qd = 75 – 20(4) + 2(4)^2

Qd = 75 – 80 + 2(16)

Qd = 75 – 80 + 32

Qd = 27

Puttting Price is 4 dollar and Quantity of demand (Qd) is calculated 27.

Price Elasticity Demand Equation:

Є= dQ / dP x P /Q

Now putting values.

Qd = 75-20p+2p2
Qd = 75-20p+2p2
2
dQd /dP = d(75-20p + 2p )/dP

= 0-20(1)+4p

= -20+4(4)

= -20+16

dQd /dP = -4

Now putting values in equation.

= dQd /dP x P/Q

= -4 x 4 / 27

= -16/27

= -0.592

In the above figure, Elasticity for Bigpharma Industry is equal less than 1 (ignoring minus sign) which
shows that the demand curve is inelastic.

Solution 2:

calculating Total Revenue?

Price is given $4

Quantity of demand (Qd) = 27

TR = P x Q

TR = 4$ x 27

TR = 108$

Solution 3:

If Price elasticity of demand of Virabolac becomes -15/14

then Its absolute value (ignoring minus sign) is greater than one so it is point elastic.