moving to homework help. now please show some work or at least some thoughts on the matter
i think I solved it I just want to know if it is right
a. P=120-1.25q, to get the quantity when the price is 80, just represent P with 80 in the equation:
q=32. The quantity demanded when the price is $80.
b. To get the price elasticity between the price 80 and 60, we must first get the quantity at both prices. We already know that of $80 are 32 units. $60 is
PED= (%change in quantity)/ (% change in price)
%change in quantity = (chg in qty/ initial qty) * 100
% change in price = 32-48= -16.
Initial quantity is 32.
%change in quantity = (-16/32)*100
= -50%= 50%.
% change in price = (change in price/ initial price)*100
change in price=80-60=20.
Initial price= 80
% change in price= (20/80)*100
Price Elasticity of Demand = 50%/25%
Price Elasticity of Demand = 2.
The good is an elastic good.
c. Equilibrium is where demand is equal to supply.
q=40. This is the equilibrium quantity.
For the equilibrium price, substitute for the equilibrium quantity in any of the demand or supply equation. Taking the supply equation,
P=70 the equilibrium price.
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