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Let\'s say that the demand for XBox One video game consoles can be described by

ID: 1224571 • Letter: L

Question

Let's say that the demand for XBox One video game consoles can be described by the following equation: Q = 15,000 - 20PX In this equation Px is the price of an XBox One. Calculate price elasticity of demand for the XBox One when the price is $300. Be sure to carefully follow all numeric directions; round intermediate steps to four decimal places and your final answer to two.

Consider again the market for XBox One video game consoles. From your calculation, we can conclude that XBox Ones

have (relatively) inelastic demand

Explanation / Answer

Q = 15,000 - 20PX

price is $300

Elasticity= P/Q*(dQ/dP)

=300/(15000-20*300)*(-20)

= -0.6667

= -0.67

Hence it has (relatively) inelastic demand

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