HW chap 2


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Unformatted text preview: 2011 Explanation: a. First find the elasticity of demand. e z to.mhe c loud.mc gr a w- hill.c om/hm.tpx? todo= pr intvie w 4/9 1/14/14 Assignme nt Pr int Vie w (103,000 ­ 53,000) / (1.75 ­ 3.00) = ­ 40000.00 = ­ B Use Ed to derive the linear demand curve of the form: Qd = A – BP. Use known values for Qd, B, a n d P to solve for A. Use th is re su lt to a n swe r p a rt b . b. The largest total expenditure and maximum revenue occur when the price elasticity of demand equals –1. 6. awar d: 16.66 out of 16.66 points 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 E s = 1. 82 . . rev is ed jrl 08­09...
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