The only difference is that we assume that 0 whereas

Info icon This preview shows pages 3–4. Sign up to view the full content.

View Full Document Right Arrow Icon
The only difference is that we assume that, ≥ 0, whereas the demand elasticity is assumed ≤ 0. If = 0, then P = 1, and Q = K (the case of the perfectly inelastic supply curve). If > 0, however, then a constant-elasticity supply function must begin at the origin, since when P = 0, P = 0, and hence Q = 0. In Figure M.8.1, three constant-elas- ticity supply functions are shown. If = 1, then Q = KP 1 = KP, which is a straight line through the origin with slope ∆ P/ Q = P/Q = K. Any supply curve that is a ray or straight line from the origin has unitary elasticity of supply. If > 1, we say that it is elastic, and if < 1, we say that it is inelastic. MATH MODULE 8: SOME SPECIAL FUNCTIONS AND FORMULAS M8-3 P O Q ε S > 1 ε S = 1 ε S < 1 FIGURE M.8-1
Image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
2. Exercises 1. Evaluate the following, using mainly brainpower for (a) to (k) and calculator power for (l) and (m): (a) 6 7 / 6 9 ; (b) 6 9 / 6 7 ; (c) 3 a 4 / 6 a 3 ; (d) 12 3 – 5 ; (e) (3 a ) 2 (3 a ) 3 ; (f) 3 a 2 (3 a ) 3 ; (g) 16 1.5 / 4 2 ; (h) 4 132 / 2 265 ; (i) (1/4) –0.5 ; (j) 2 4 / 4 2 ; (k) ( 2) 6 ; (l) ( 2) 1.5 [to 3 decimal places]; (m) 17 2/5 . 2. (a) For cases (i) to (iv), calculate the logarithms to base 10 and to base e : (i) 10; (ii) e ; (iii) 100; (iv) e 2 . (b) For each case, calculate the ratios log/ ln and ln /log. (c) Calculate the ratios (iii)/(i) and (iv)/(ii) for both log and ln results. TR measured in $/period. The Total Cost (TC) function is initially TC = 0.5 Q , with Total Costs also measured in $/period. Profits (in $/period) = TR – TC. M8-4 MATH MODULE 8: SOME SPECIAL FUNCTIONS AND FORMULAS
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern