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1. 1. Given the following demand and supply functions:

Qd = 260 – 20P
Qs = 40P – 40
• Solve for the equilibrium quantity and equilibrium price.
Equilibrium price: 5Equilibrium quantity: 160
• Draw the supply and demand curves in one plane. Label the equilibrium price and quantity.
• Solve for the price level where there is a surplus of 300 units.
• Solve for the price elasticity of demand between P = 4 and P = 6. Determine whether demand is price elastic, price inelastic or unit elastic.
Price Elasticity Demand: 1.25 - Elastic
1. Given the following demand and supply functions:Qd = 48 - 4P Qs = 4P - 16
1. Solve for the price elasticity of demand between P = 6 and P = 10. Determine whether demand is price elastic, price inelastic or unit elastic.
EPD = -2 Inelastic
2. Solve for the price elasticity of supply between P = 10 and P = 15. Round offfinal answer to the nearest hundredths. Determine whether supply is price elastic, price inelastic or unit elastic.
EPS =1.47 Elastic

3. Solve for the income elasticity of demand when doubling the initial income of Php 1000will result to a change in quantity from 13 units to 11 units. Is the good an inferior or normal good? If normal, luxury or necessity?EYD = -0.25 inferior good

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Updated: February 22, 2016
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