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5 March, 22:52

A general exponential demand function has the form q = Ae-bp (A and b nonzero constants). (a) Obtain a formula for the price elasticity E of demand at a unit price of p.

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  1. 6 March, 02:51
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    E = (p/q) (dq/dp)

    dq/dp = - bAe^ (-bp)

    (p/q) (dq/dp) = [p/Ae^ (-bp) ] (-bAe^ (-bp))

    = - pb
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