Question
The supply function of a certain commodity is Q = a + b P2 + W1/2, where P is price and W is weather-related conditions
The supply function of a certain commodity is
Q = a + b P2 + W1/2, where P is price and W is weather-related conditions affecting the supply. Assume that a<0 and b>0.
Find the price elasticity of supply (QP) and the weather elasticity of supply (QW) . Explain intuitively what those elasticities mean. (4 points)
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Using R For Econometrics
Authors: Florian Heiss
1st Edition
1523285133, 9781523285136
