If the price of a product is p (dollars), the number of units demanded is given by the equation q-pe-3p (a) Find the price elasticity of demand by using the differentials definition of elasticity. Fully simplify your answer.
(b) Use your answer from part (a) to estimate the percent change in q when the price is raised from $2.00 to $2.10.

the estimate the percent change in q when the price is raised from $2.00 to $2.10 decreases by 25%

Step-by-step explanation:

Given that:

the number of units demanded

Taking differentiations ; we have,

Now; the price elasticity of demand using the differentials definition of elasticity  is:

(b)   Use your answer from part (a) to estimate the percent change in q when the price is raised from $2.00 to $2.10.

The estimate of the percentage change in price is :

= 5%

From (a)

Now at p = $2.00

E(2) = 1 - 3 (2.00)

E(2) = 1 - 6

E(2) = -5

The percentage change in q = -5 × 5%

The percentage change in q = -25%

Thus; we can conclude that the estimate the percent change in q when the price is raised from $2.00 to $2.10 decreases by 25%

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