<p>Your work for 1 and 2 is correct.</p>

<p>For 3, look at each segment individually. There are two points which have an elasticity of $-1$, one on each segment.</p>

CC BY-SA 3.0
2017-05-05T20:07:02.990Z
2017-05-05T20:07:02.990Z
ahorn
<p>Only two groups buy the Dripfix, abbreviated as good $D$. Group 1's demand function for the Dripfix is $f_1 (p_D)=300-p_D$, where $p_D$ is the price of Dripfix. Group 2's demand function is $f_2(p_D)=120-p_D$.</p>

<ol>
<li>What is each group's "own" price elasticity of demand?</li>
<li>What is the equation for the market demand?</li>
<li>At what price $p_D$ is the market elasticity $-1$?</li>
</ol>

<hr>

<p>Here is my work so far:</p>

<ol>
<li>Group 1's price elasticity is $\epsilon_1=-\frac{p_D}{300-p_D}$. Group 2's is $\epsilon_2=-\frac{p_D}{120-p_D}$.</li>
<li>The market demand is $420-2p_D$ for $p_D \leq 120$ and $300-p_D$ for $p_D &gt; 120$.</li>
</ol>

<p>Are these two parts correct so far? If so, how do go about determining the market elasticity when the market demand is made up of two components?</p>

<microeconomics><elasticity>
Finding "own" price elasticity of demand
Bing
# Finding "own" price elasticity of demand

(Asked by: username_0 on 2017-05-05)

Only two groups buy the Dripfix, abbreviated as good $D$. Group 1's demand function for the Dripfix is $f\_1 (p\_D)=300-p\_D$, where $p\_D$ is the price of Dripfix. Group 2's demand function is $f\_2(p\_D)=120-p\_D$.

1. What is each group's "own" price elasticity of demand?
2. What is the equation for the market demand?
3. At what price $p\_D$ is the market elasticity $-1$?

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Here is my work so far:

1. Group 1's price elasticity is $\epsilon\_1=-\frac{p\_D}{300-p\_D}$. Group 2's is $\epsilon\_2=-\frac{p\_D}{120-p\_D}$.
2. The market demand is $420-2p\_D$ for $p\_D \leq 120$ and $300-p\_D$ for $p\_D > 120$.

Are these two parts correct so far? If so, how do go about determining the market elasticity when the market demand is made up of two components?

**Tags:** microeconomics, elasticity


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## 1 answers

### Answer by username_1 on 2017-05-05. Score: 1

Your work for 1 and 2 is correct.

For 3, look at each segment individually. There are two points which have an elasticity of $-1$, one on each segment.


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