Can someone please help me with this microeconomic questions. I really will appreciate your guys help.
1. How can I get the price elasticity of demand between:
Example: P=$25 and P=$20
2. How can I get the price elasticity of supply between:
Example: P=$10 and P=$8
3. Suppose the price elasticity of demand for farm products is enalastic. If the federal government wants to follow policy of increasing income for farmers, what type of programs will the government enact??
Again thanks a lot for everyone who is helping.
2007-02-22 04:08:33 · 1 answers · asked by Katy 1 in Education & Reference ➔ Homework Help
1. and 2. You need respective quantities to get the elasticities. Elasticity = (Q2 - Q1) / (Q2 + Q1) x (P2 + P1) / (P2 - P1)
3. If demand elasticity is inelastic, that means that buyers are not price sensitive. So anything that raises prices will raise total income for farmers. Example, a minimum price law. In fact there is such in existence in the US with milk.
2007-02-22 08:35:24 · answer #1 · answered by Jamestheflame 4 · 0⤊ 0⤋