Economics: Economics of Enterprise Economics of Enterprise Question #5919 from vanessa
Suppose the equation for demand can be expressed as P=120-1.25Q. The equation for supply can be expressed as p=1.75Q A. What is the Quantity demanded at a price of $80 b. What is is the price elasticity of demand between the price of $80 and $60 c. Find the equilibrium price and quantity
Expert's answer
A. Qd = (120 - P)/1.25 = (120 - 80)/1.25 = 32
b. Q(80) = 32, Q(60) = 48
E
= (32 - 48)/80*140/(80 - 60) = -16/8*14/20 = -1.4 - demand is elastic
c. Qd =
Qs,
(120 - P)/1.25 = P/1.75,
1.4*(120 - P) = P,
2.4P = 168,
P =
70
Q = 70/1.75 = 40
Comments
Ask Your question
Related Questions
Link to us
Share with friends
Get homework help with AssignmentExpert:
No comments
Leave a comment