The demand function for mobile applications at the Apple App Store is QA = 1.4p-

Question

The demand function for mobile applications at the Apple App Store is QA = 1.4p-20 and the demand function at Google Play is QG=1.4p-3.7 where the quantity is in millions of apps. These demand functions are equal (cross) at one price. What are the elasticities of demand for each demand curve where they cross? Where the demand curve for the Apple App Store and the demand curve for Google Play cross, the elasticity of demand is EA- for the Apple App Store and for Google Play. (Enter your responses rounded to one decimal place,)

Explanation / Answer

Demand for Apple App is QA = 1.4p-2.0

Demand for Google play is QG = 1.4p-3.7

They intersect where QG =QA

1.4p-3.7 = 1.4p-2

p-3.7 = p-2

p2 = p3.7

1 = p1.7

P = 1.

Demand at P= 1 is 1.4 for both the apple and Google play store

Elasticity of demand is e = (dQ/dP)*(P/Q)

eA = (-2.8p-3)*(1/1.4p-2)

eA = -2/p = -2

Elasticity of demand for Google is

eG = (-5.18p-4.7)*1/(1.4p-3.7)

eG = -3.7

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