Answer to Question #109135 in Microeconomics for m.saad farooq khan

Question #109135
demand 100-2p ,supply =3p at the equilibrium ,calculate the price elasticities of demand and supply
1
Expert's answer
2020-04-15T09:18:15-0400

With given supply and demand curve the equilibrium price and quantity are P=20. Q=60.

Point elasticity formula: 

"E = \\frac{dQ}{dP}\\times\\frac{P}{Q}."

So, "Ed = (-2)\\times\\frac{20}{60}=-\\frac{2}{3}."

"Es = 3\\times\\frac{20}{60}=1."

The price elasticity of demand is -2/3, the price elasticity of supply is 1.


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