HW chap 2

3 3 e d 2 1 3 3 7 3 e d0 3 6 priceelasticityofsupply q

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Unformatted text preview: 2011 e z to.mhe c loud.mc gr a w- hill.c om/hm.tpx? todo= pr intvie w 5/9 1/14/14 Assignme nt Pr int Vie w Section: Elasticities of Demand and Supply Worksheet Consider the following demand and supply functions for corn: Demand is given by Supply is given by At the equilibrium price, what are the elasticities of demand (Ed ) and supply (Es)? (Note: In your calculations, round quantities to 1 decimal place and price to the nearest penny.) Instructions: Round your answers to 2 decimal places. Include any negative signs if necessary. E d = ­0.36 ± .03 . E s = 1.82 ± .03 . rev is ed jrl 08­09­2011 Explanation: Fin d e q u ilib riu m p rice b y se ttin g Qd = Qs . 1 0 – 2 P = 1 0 P – 6 P = $ 1 . 3 3 . Price elasticity of demand: Qd = 1 0 – 2 P E d = – B × (P /Q) E d = – 2 × (1 .3 3 /(1 0 – 2 × (1 .3 3 )) E d = – 2 × (1 .3 3 /7 .3 ) E d = ­0 .3 6 . Price elasticity of supply: Q s = 1 0 P – 6 E s = d × (P /Q) E s = 1 0 × (1 .3 3 /(1 0 × (1 .3 3 ) – 6 ) e z to.mhe c lou...
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This note was uploaded on 01/14/2014 for the course ECO 3352 taught by Professor Ax during the Fall '13 term at Troy.

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