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Questions › GATE › GATE 2025 › Q28
1 mark, −0.333Microeconomics › Demand theory and elasticity › Price elasticity of demandEasyabout 1 min

GATE 2025 Question 28: Demand theory and elasticity

The demand function is given as log⁡Q=log⁡A+0.5log⁡P\log Q = \log A + 0.5\log PlogQ=logA+0.5logP, where QQQ is quantity, PPP is the unit price of the good and AAA is a positive real number. The own price elasticity of demand is

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The demand function is given as log Q = log A + 0.5log P, where Q is quantity, P is the unit price of the good and A is a positive real number. The own price elasticity of demand is (A) Perfectly elastic (B) Perfectly inelastic (C) Elastic (D) Inelastic

Demand theory and elasticity has come up 161 times in 7 exams since 2004.

What this question tests

This question is on Price elasticity of demand, part of Demand theory and elasticity in Microeconomics.

How responsive quantity is to price, at a point, along a linear curve, and for constant-elasticity demand.

TestStop has 41 past-paper questions on this subtopic; the nearest in year are below.

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Question from the GATE 2025 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.