The market for rubber bands was in equilibrium at P* = 12 and Q* = 36. Then,

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The market for rubber bands was in equilibrium at P* = 12 and Q* = 36.

Then, the government put a price restriction into place, pushing the price up to P = 18.

As a result, quantity supplied became Q5 = 48 and quantity demanded becameQD= 12.

a. Calculate the elasticity of supply. Is supply elastic or inelastic?

b. Calculate the elasticity of demand. Is demand elastic or inelastic?

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Globalization For Development Meeting New Challenges Meeting New Challenges

ISBN: 9780191624032

1st Edition

Authors: Ian Goldin, Kenneth Reinert

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Question Posted: Nov 08, 2024 07:00 AM

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The market for rubber bands was in equilibrium at P* = 12 and Q* = 36. Then,

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Globalization For Development Meeting New Challenges Meeting New Challenges

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