Lecture

1. Suppose a linear pray function is cast away by: Qd = 400 - 10P a. cast the cost ginger bollock of involve when the set is 30. [pic] b. Calculate the cost snatch of demand when the worth is 10. [pic] 2. Consider a competitive market for which the quantities demanded and supplied (per year) at mixed worths are given as follows: |Price | supplicate | tally | |($) |(millions) |(millions) | | 60 |22 |14 | | 80 |20 |16 | |100 |18 |18 | |120 |16 |20 | a. Calculate the impairment elasticity of demand when the price is $80 and when the price is $100. Answer: a.

[pic] With each price increase of $20, the meter demanded decreases by 2. Therefore, [pic] At P = 80, standard demanded equals 20 and [pic] Similarly, at P = 100, quantity demanded equals 18 and [pic] b. Calculate the pric e elasticity of supply when the price is $80! and when the price is $100. issue: The elasticity of supply is given by: [pic] With each price augment of $20, quantity supplied increases by 2. Therefore, [pic] At P = 80, quantity supplied equals 16 and [pic] Similarly, at P = 100, quantity supplied equals 18 and [pic] c. Calculate the price elasticity of demand when the price is increase from $80 to $100. ANSWER: [pic] d. Calculate the price elasticity of supply when the price is increase from $80 to...If you want to get a liberal essay, hostel it on our website: BestEssayCheap.com

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