Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Consider two markets: the market for motorcycles and the market for pancakes. The initial equilibrium for both markets is the same, the equilibrium price is

Consider two markets: the market for motorcycles and the market for pancakes. The initial equilibrium for both markets is the same, the equilibrium price is $3.50, and the equilibrium quantity is 37.0. When the price is $10.75, the quantity supplied of motorcycles is 73.0 and the quantity supplied of pancakes is 111.0. For simplicity of analysis, the demand for both goods is the same.

Using the midpoint formula, calculate the elasticity of supply for pancakes. Please round to two decimal places.

Supply in the market for motorcycles is:

A. more elastic than supply in the market for pancakes.

B. less elastic than supply in the market for pancakes.

C. the same elasticity as supply in the market for pancakes.

D. There is not enough information to tell which has a higher elasticity.

Step by Step Solution

3.48 Rating (161 Votes )

There are 3 Steps involved in it

Step: 1

Consider the given problem where there are two goods motorcycle and p... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Document Format ( 2 attachments)

PDF file Icon
609b47a1c85a5_31520.pdf

180 KBs PDF File

Word file Icon
609b47a1c85a5_31520.docx

120 KBs Word File

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Economics

Authors: Roger A. Arnold

12th edition

978-1305758674, 1305758676, 978-1285738321

More Books

Students also viewed these Economics questions