Question
The supply function of a certain commodity is:Q = a + bP 2 + R 1 2 (a < 0, b > 0) Here: R
The supply function of a certain commodity is:Q = a + bP
2 + R
1
2 (a < 0, b > 0)
Here: R is rainfall
(i) Find price elasticity of supply and rainfall elasticity of supply.
(ii) How do the elasticities vary with P and R?
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Economics Principles and Policy
Authors: William J. Baumol, Alan S. Blinder
12th edition
978-0538453677, 538453672, 978-0538453622, 538453621, 978-0538453653
