Essay
Consider a market that is described by the equations Qd = 10 - 0.5P, and Qs = -2 + 1.5P. What is the equilibrium price? What is the equilibrium quantity? If the supply curve shifts and the new supply equation is -4 + 1.5P, what are the new equilibrium price and the new equilibrium quantity? Calculate the price elasticity of demand. Is the demand curve between price 1 and price 2 inelastic or elastic?
Correct Answer:
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10 – 0.5P = –2 + 1.5P
12 = 2P
P = $6 and...View Answer
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Correct Answer:
Verified
12 = 2P
P = $6 and...
View Answer
Unlock this answer now
Get Access to more Verified Answers free of charge
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