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3) Consider the formula derived in class for the elasticity of residual demand for a rm whose market share is given by :3 : Ei
3) Consider the formula derived in class for the elasticity of residual demand for a rm whose market share is given by :3 : Ei : 5 w (1;?) an. 3: a) How is this fomlula related to equation (1) in the Competition Chapter? b) When will a rm with low market share have inelastic residual demand despite the low share? c) When will a rm with high market share have a large residual demand elasticity despite the high market share
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