Suppose market demand is given Qd=a-bp as and market supply is given as, Qs=c+dp and then find the following
o Equilibrium price
o Equilibrium quantity
o Price elasticity of demand at equilibrium
o Price elasticity of supply at equilibrium
Price elasticity of supply at equilibrium
PERCENTAGE CHANGE IN QUANTINTY SUPPLIED =
PERCENTAGE CHANGE IN PRICE=
change in quantity SUPPLIED
change in price
PRICE ELASTICITY =
PRICE ELASTICITY =
but from the supply equation is the gradient of the equation
therefore from
is the gradient of the equation
the price elasticity of supply will be
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