Suppose that you are given the following demand and supply functions, respectively: Qd=σ Qs=P Where Qd is the quantity is demanded, Qd is the quantity supplied, P is the price, and is a non, negative integer. REQURED: Determine the equilibrium price and equilibrium quantity. Draw a well labelled diagram showing (i) above. Find the price elasticity of demand at the equilibrium point. What is the nature of elasticity? Find the price elasticity of supply at the equilibrium point. What is the nature of elasticity? Suppose now that government subsidises consumers’ purchases by per unit. Suppose further that this subsidy goes directly to the consumers. Find the new level of equilibrium price and quantity. Draw a diagram showing (viii) above. Find the price elasticity of demand at the equilibrium point in (vii Find the price elasticity of supply at the equilibrium point in (vii).
Suppose that you are given the following demand and supply functions, respectively: Qd=σ Qs=P Where Qd is the quantity is demanded, Qd is the quantity supplied, P is the price, and is a non, negative integer. REQURED: Determine the equilibrium price and equilibrium quantity. Draw a well labelled diagram showing (i) above. Find the price elasticity of demand at the equilibrium point. What is the nature of elasticity? Find the price elasticity of supply at the equilibrium point. What is the nature of elasticity? Suppose now that government subsidises consumers’ purchases by per unit. Suppose further that this subsidy goes directly to the consumers. Find the new level of equilibrium price and quantity. Draw a diagram showing (viii) above. Find the price elasticity of demand at the equilibrium point in (vii Find the price elasticity of supply at the equilibrium point in (vii).
Chapter5: Elasticity Of Demand And Supply
Section: Chapter Questions
Problem 1.1P: (Calculating Price Elasticity of Demand) Suppose that 50 units of a good are demanded at a price of...
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Suppose that you are given the following
Qd=σ
Qs=P
Where Qd is the quantity is demanded, Qd is the quantity supplied, P is the
REQURED:
- Determine the
equilibrium price andequilibrium quantity . - Draw a well labelled diagram showing (i) above.
- Find the
price elasticity of demand at the equilibrium point. - What is the nature of elasticity?
- Find the price elasticity of supply at the equilibrium point.
What is the nature of elasticity?
- Suppose now that government subsidises consumers’ purchases by per unit. Suppose further that this subsidy goes directly to the consumers. Find the new level of equilibrium price and quantity.
- Draw a diagram showing (viii) above.
- Find the price elasticity of demand at the equilibrium point in (vii
Find the price elasticity of supply at the equilibrium point in (vii).
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