Trigonometry

The price elasticity of demand is a measure of the responsiveness of quantity demanded to a change in price. In this exercise, it is given by the formula

$\varepsilon_D = \left | \frac{\Delta Q_D}{\Delta P} \cdot \frac{P}{Q_D} \right |$

where $P$ is the price, and $Q_D$ is the quantity demanded. The price elasticity of demand tells us by how much percentage the quantity demanded changes as a result of a $1\%$ increase in price.

Consider a market of candybars with a demand curve as depicted below.

The vertical axis denotes the price $P$ and the horizontal axis denotes the quantity demanded $Q_D$ . The demand curve is a downward-sloping line that makes an angle $\theta$ with the $P$ -axis. demand_curve

For this market, we have $\theta = 60^{\circ}$ and $\dfrac{P}{Q_D} = 1.7$ .

Calculate the price elasticity of demand. Round your answer to one decimal place.

$\varepsilon _D =$

Applications: Trigonometry

Trigonometry: Step 1/3