Basic Demand &amp; Supply

# Basic Demand & Supply - Define Price Elasticity of...

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Define Price Elasticity of Supply: Define Price Elasticity of Demand: Why? Why? Construct a demand curve and supply curve, where the equilibrium creates a consumer surplus of 20 and a producer surplus of 80. 1. The nightly supply curve for babysitting services is P = 5 + .01Q and the nightly demand curve for babysitting services is P = 35-.02Q, where Q represents hours of babysitting per night and P represents the price (wage) per hour of babysitting. a. What is the lowest hourly wage at which someone is willing to supply at least some babysitting services? What is the highest hourly wage at which someone is willing to demand at least some babysitting services? b. What is the equilibrium hourly wage for babysitting services and how many hours of babysitting services are hired per night at this wage? c. What is the total surplus?

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## This note was uploaded on 07/01/2011 for the course ECO 304K taught by Professor Hickenbottom during the Fall '10 term at University of Texas.

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Basic Demand & Supply - Define Price Elasticity of...

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