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Lecture 3

MATA32H3 Lecture 3: MATA32H3-Lecture03-Elasticity in DemandPremium


Department
Mathematics
Course Code
MATA32H3
Professor
Karimian Pour, C.
Lecture
3

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MATA32H3-Lecture03-Elasticity of Demand
(d/dx) ln(x) = 1/x
(d/dx) e^x = e^x
^review
Example:
y=ln(x^2+3sqrt(x))
Find y’
Let u = x^2+3sqrt(x) = x^2+3x^(1/2)
=(1/u)(2x+(3/2)x^(-1/2))
= 2x+(3/2sqrt(x))
X^2+3sqrt(x)
Some assumptions
Let q=quantity
P=unit price (price per unit)
P=f(q) is a demand function
The (point) elasticity of demand (ED)
= (P/q) = (f(q)/q)
(dP/dq) f’(q)
Facts about “eta”
1. It is actually a function of q
2. It is always less than 0
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