Suppose the supply and demand curves for a particular product are given by: QS = -20 + 2P QD =100 - 2P where QS and QD are quantities in units and P is the price per unit. (b) Calculate both the demand and supply elasticity around the equilibrium point. [Hint: you can use either the point method or the average arc (midpoint) method.] [5]

Suppose the supply and demand curves for a particular product are given by: QS = -20 + 2P QD =100 - 2P where QS and QD are quantities in units and P is the price per unit. (b) Calculate both the demand and supply elasticity around the equilibrium point. [Hint: you can use either the point method or the average arc (midpoint) method.] [5]

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

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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