Problem 2 - c If due to a wage increase in the agricultural...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
EC 11. Principles of Macroeconomics Jose U. Mora Problem on Elasticities of Demand and Supply Due on Thursday, Sept 27. Assume that the demand and supply function for Wheat are given by: Qd = 1250 – 3P and Qs = 150 + 3P. (Show your work algebraically and graphically) a. What is the price that clears the market? How many units of Wheat are sold at that price? b. How much would producers collect in revenue at the market clearing price?
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: c. If due to a wage increase in the agricultural sector the supply function changes to Q’s = 100 + 3P, determine the new equilibrium price and quantity. d. Compute the corresponding midpoint price elasticity between the two equilibria (Hint: Demand or Supply price Elasticity?)...
View Full Document

This note was uploaded on 04/07/2008 for the course BSAD ECON 040 011 taught by Professor Boveemora during the Spring '08 term at Vermont.

Ask a homework question - tutors are online