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Solution and answers 3. The demand schedules for three individuals Erick, John and Mary in a particular market are given as follows. mm mm The

Solution and answers

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3. The demand schedules for three individuals Erick, John and Mary in a particular market are given as follows. mm mm The market supply mction is given by QS = -50 + 4.5P (a) i. What is the arc elasticity of demand for the market as the price increases from 300 to 400 and interpret it? ii. What is the point elasticity of demand for the market as the price increases from 100 to 150 and interpret it? iii. If the objective is to maximize prot, in which case it is protable to increase/decrease price? (b) Solve for market equilibrium price and quantity

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