Question
Consider the following market demand: Q D = a - bP, where a, b > 0. At price P = 0.5(a/b), the absolute value of
Consider the following market demand: QD = a - bP, where a, b > 0. At price P = 0.5(a/b), the absolute value of the price elasticity of this market demand is?? HINTS: First compute the expression for the price elasticity of this market supply. Next, compute the market quantity supplied at P = 0.5(a/b). Finally, substitute your P and QS values into your expression of the price elasticity of this market supply, to determine the absolute value of the price elasticity at that point.
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Quantitative Methods for Business
Authors: David R. Anderson, Dennis J. Sweeney, Thomas A. Williams, Jeffrey D. Camm, James J. Cochran
13th edition
1285866312, 978-0357685648, 978-1285866314
