Question

Answer the questions below in a separate file or scan your pencil and paper answers and then attach the file.

A)     Draw a graph of the supply and demand curves for imported cotton. Make sure you label  everything. (Note: Use the endpoints to draw the curves.)

B)    What is the equilibrium quantity and price?

C)    Which curve is the more elastic?

  Which curve is the least elastic?

D)   Calculate the Price Elasticities for the following; ( Show your calculations)

Curve Price Change Elasticity

Demand for Imported Cotton $4.00 to $6.00   

Supply of Imported Cotton $5.00 to $6.00

Price per Pound of Cotton	Quantity Demanded of Imported Cotton	Quantity Supplied of Imported Cotton
$2	2400	400
$3	2100	600
$4	1800	800
$5	1500	1000
$6	1200	1200
$7	900	1400
$8	600	1600
$9	300	1800

Answer 1

© Equation of Demand Р-Р, , , --Р Q-Qi Q-Q, see table pic2 P - 3 300P - 600 = -Q + 2400 >> 300P+Q=3000] -0 1 Eqs of Demand P-2 Q-2400 3-2 2100-2400 ,- 2400 0 - 2 100 Simonianly Equation of supply P-PL = P₂ -PL Q-Qi Q2-0 - P-2 3-2 P2 --> --600 - 400 600-400 3 0.600 3 2001–400 = Q-400 => 200 P = Q -- - Equation of supply Price suplay ( 2023Q) E = Equilibrium paint a Deward ( 3004+Q=3000) 3000,0) a

® The Equilibrium Slove ego ① and cu 1 we Gel 300 p + Q = 3000 200 P = Q [P= 6 [Q+= 1200] © Supply Cenwe have more Elastic due to the slope of the supply cure have high value Demand cure have least Elantic deve to slope have less value as compared to supply anne O price elasticity of = P2-Q1 - Pz-pl demand I Pq tell Path P, = 84 +0=1800 le = $6 + Q2 = 1200 6-4 $ 1200-1800 ? 200 +1900 Inn price elasticity of dd =-1 price elasticity of supply = 1200-1000- 6-5 645 1200H 000 2 price elasticity ! of supply?! lunt El ashle by