Mathematics
OpenStudy (anonymous):

help

OpenStudy (anonymous):

OpenStudy (phi):

This is definitely not my area. But according to wikipedia Price elasticity is the percentage change in quantity demanded in response to a one percent change in price So using this definition, we can first find the quantity when price=34 (P=34) Q= (95-P)^2 = (95-34)^2= 61^2= 3721 Now find the quantify Q when we increase the price by 1% (multiply 34*1.01) Q2= (95-34*1.01)= 3679.64 The percent change is $100\cdot \frac{Q2-Q}{Q} = 100\cdot \frac{3679.64-3721}{3721}= -1.11 \%$ They say it is often treated as a positive number, though it is negative? Wikipedia also gives a formula price elasticity is equal to the absolute value of the first derivative of quantity with respect to price (dQd/dP) multiplied by the point's price (P) divided by its quantity (Qd). $E= \frac{P}{Q} \frac{dQ}{dP}$ starting with Q= (95-P)^2 we find dQ/dP = -2(95-P)= 2P-190 when P=34, dQ/dP = 68-190= -122 using the absolute value dQ/dP= 122 with P=34 and Q= 3721 (see above), and dQ/dP= 122, the equation for E gives 34*122/3721= 1.11 which matches above.