Answer to Question #51724 in Other Economics for Andrew
Suppose that the market for paint is in equilibrium. The demand for paint is given by Qd=5000-8P. The supply of paint is given by Qs=2000+2P. What is the price elasticity of demand at the market equilibrium?
Price elasticity of demand (PED) measures the change in the quantity demanded relative to a change in price for a good or service. The formula for price elasticity is: Price Elasticity = (% Change in Quantity) / (% Change in Price) First of all it is necessary to calculate equilibrium price and demand