elasticity e = df/f รท dp/p = df/dp * p/f
df/dp = A(-0.13)p^(-1.13)
so, e = -0.13Ap^(-1.13) * p/A p^(-0.13)
= -0.13/p^0.26
so, we have negative elasticity, meaning that demand will go down if price goes up.
It also shows that for larger prices, the elasticity changes, becoming less significant.
The demand for rice in Japan for a particular year was estimated by the general function q = f (p) =Ap^(-0.13), where p represents the price of a unit of rice, A represents a constant that can be calculated uniquely for a particular year, and q represents the annual per capita rice demand. Calculate and interpret the elasticity of demand
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