Consider a Market That Is Described by the Equations Q_d

question 98

Essay

Consider a market that is described by the equations Q_d = 10 - 0.5P, and Q_s = -2 + 1.5P. What is the equilibrium price? What is the equilibrium quantity? If the demand curve shifts and the new demand equation is 8 - 0.5P, what are the new equilibrium price and the new equilibrium quantity? Calculate the price elasticity of supply. Is the supply curve between price and price 2 inelastic or elastic?

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