Homework Answers
Answer: Price elasticity of demand = (-) 2
Given:
|
P1 = $22 |
Q1 = 16 |
|
P2 = $18 |
Q2 = 24 |
Formula:
Calculation:
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(a)
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Please show all steps clearly
(a)
Suppose there is a price increase to $16. How much is total
consumer surplus in this market at the new price?
(b)
(c)
Suppose there is a price increase to $25. How much is total
producer surplus in this market at the new price?
(d)
Suppose there is a price decrease to $20. What would be the
amount of the dead weight loss in this market at the new price?
(e)
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