Answer:
option (c) inelastic
Explanation:
Given:
Q = 24 – 2 P
at P = 4
Q = 24 - 2(4)
= 16
Now,
Elasticity = [tex]\frac{\textup{dQ}}{\textup{dP}}\times\frac{\textup{P}}{\textup{Q}}[/tex]
on substituting the respective values, we get
Elasticity = [tex]\frac{\textup{d(24 – 2 P)}}{\textup{dP}}\times\frac{\textup{4}}{\textup{16}}[/tex]
or
Elasticity = -2 × 0.25
or
Elasticity = - 0.5
Since,
Elasticity is less than 1, therefore, the demand is inelastic.
Hence,
option (c) inelastic
