Application of the Price Elasticity of Demand Formula
Prove that the Price Elasticity of Demand (PED) of Q = aP^-m is m. In the video, we used our knowledge from the formula for calculating price elasticity of demand and our mathematical skills to find solution to the problem.
1. We differentiated the demand function with respect to P
2. We substituted it into the formula
3. Simplify the equation.
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