Having a hard time understanding the concept of Elasticity, If
you can please be detailed.
QD = 1,600 – 125 * P
QS = 440 + 165 * P
You should have calculated the equilibrium in this market to be
(P*, Q*) = ($4,
1,100).
a. Calculate the price elasticity of demand at the equilibrium. Is
this elastic or
inelastic?
b. Calculate the price elasticity of supply at the equilibrium. Is
this elastic or
inelastic?
c. Suppose the government sets...