1. Assume there are markets for three goods (Q, denotes demand for good i, Q', denotessupply of good i) with interconnected demands and supply.Demand is given for every good by:Qa:=a – 2PP2 + 2P3,2Qå :=30 – P2Q:=100 – 2P3 + P1 + ÷P2.Supply is given for every good by:11Q: :=10 +P +P2 – P3,21Q :=2P, -P +P3,11Q :=5 + P3 + PP2.(a)Compute price elasticities ɛq P1 ; EQ%,P2; €Q%,P3; EQP3» EQ%.P3•Evaluate these elasticities at a point P = 1, P2 = ,, P3 = 1. What can(b)you say about the sign and magnitude of them (elastic/inelastic).(c)of equilibrium conditions in the form AP = d, specify A, P, d.Write down equilibrium conditions for every market. Express the system(d)a for all prices to be non-negative?Find equilibrium prices Pf, P, P. What are conditions on parameter

Given Demand function for goods Qd1=a-2P1-15P2+2P3 .........(1) Qd2=30-P2-25P1+15P3…

Assume there are markets for three goods (Qå denotes demand for good i, Q denotes upply of good i) with interconnected demands and supply. Demand is given for every good by: 1 Qa:=a – 2P –P2 + 2P3, 5 1 Qa :=30 – P2 – P +Ps, 1 Qå:=100 – 2P3 + P1 + P2. upply is given for every good by: 1 1 Q :=10 +P +P – P3, 5 2 5 1 Q :=2P, -P + P3, 1 Q :=5+ P3 + P - P. a) Compute price elasticities ɛq P1, EQ?,P2; €Q%,P3» EQqP3» €Q%P3•

Assume there are markets for three goods (Qå denotes demand for good i, Q denotes upply of good i) with interconnected demands and supply. Demand is given for every good by: 1 Qa:=a – 2P –P2 + 2P3, 5 1 Qa :=30 – P2 – P +Ps, 1 Qå:=100 – 2P3 + P1 + P2. upply is given for every good by: 1 1 Q :=10 +P +P – P3, 5 2 5 1 Q :=2P, -P + P3, 1 Q :=5+ P3 + P - P. a) Compute price elasticities ɛq P1, EQ?,P2; €Q%,P3» EQqP3» €Q%P3•

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter6: Elasticity

Section: Chapter Questions

Problem 10QP

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