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Answer to Question #64248 in Microeconomics for Mero

Question #64248
The supply and demand equations for strawberries are given by: Qs= -10+5P Qd= 20-5P
a.What is the equilibrium market price and quantity for strawberries in this market?
b.Calculate the price elasticity of demand and price elasticity of supply at the equilibrium price.
Expert's answer
a) Qd=Qs, where Qs= -10+5P, Qd= 20-5P;
-10+5P=20-5P;
10P=30, P=3, Q=-10+5*3=5
Answer: P=3, Q=5.
b) Es = 5*(3/5)=3, ED=-(-5)*(3/5)=3.
Answer:Es=3, ED=3.

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