CA Foundation P3 · Chapter 8 · Question 8 of 9
The demand function for a product is q = 100 − 2p. The price elasticity of demand (in absolute value) at p = 20 is:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) 0.67
Explanation
At p = 20, q = 100 − 40 = 60 and dq/dp = −2. Elasticity = −(p/q)(dq/dp) = (20/60) x 2 = 0.667 ≈ 0.67 (two decimals). Using q/p instead of p/q gives 1.50, and using 100 in place of q gives 0.40.
More Basic Applications of Differential and Integral Calculus in Business and Economics MCQs
- Q1The derivative of y = x⁵ + 3x² − 7 with respect to x is:
- Q2The derivative of x²eˣ with respect to x is:
- Q3The total cost function of a firm is C = 0.5x² + 20x + 400 (in ₹). The marginal cost when x = 30 units is:
- Q4The derivative of y = log(3x² + 1) with respect to x is:
- Q5The profit function of a firm is P = −2x² + 120x − 500 (in ₹). The maximum profit is: