Supply function and elasticity
Supply function (S): P = 0.10Q^2 where P is price and Q is quantity
Demand function (D): P = 40Q^-0.5
Questions
1. Use the supply and demand functions to determine the equilibrium point where the market clears (S=D)
2. Complete the table below and draw a graph of supply and demand
3. Is supply elastic or inelastic?
Question 2
Qs Ps Supply ElasQd Pd
0.00 0.00 0.00
2.00 0.40 200.00 2.00 28.28 Supply and demand cu
4.00 1.60 100.00 4.00 20.00 120.00
6.00 3.60 66.67 6.00 16.33
100.00
8.00 6.40 50.00 8.00 14.14
10.00 10.00 40.00 10.00 12.65 80.00
12.00 14.40 33.33 12.00 11.55
14.00 19.60 28.57 14.00 10.69 60.00
16.00 25.60 25.00 16.00 10.00 40.00
18.00 32.40 22.22 18.00 9.43
20.00 40.00 20.00 20.00 8.94 20.00
22.00 48.40 18.18 22.00 8.53
0.00
24.00 57.60 16.67 24.00 8.16 1 2 3 4 5 6 7 8 9 10 1
26.00 67.60 15.38 26.00 7.84
Ps Pd
28.00 78.40 14.29 28.00 7.56
30.00 90.00 13.33 30.00 7.30
32.00 102.40 12.50 32.00 7.07
Question 3
The supply is elastic
Supply function (S): P = 0.10Q^2 where P is price and Q is quantity
Demand function (D): P = 40Q^-0.5
Questions
1. Use the supply and demand functions to determine the equilibrium point where the market clears (S=D)
2. Complete the table below and draw a graph of supply and demand
3. Is supply elastic or inelastic?
Question 2
Qs Ps Supply ElasQd Pd
0.00 0.00 0.00
2.00 0.40 200.00 2.00 28.28 Supply and demand cu
4.00 1.60 100.00 4.00 20.00 120.00
6.00 3.60 66.67 6.00 16.33
100.00
8.00 6.40 50.00 8.00 14.14
10.00 10.00 40.00 10.00 12.65 80.00
12.00 14.40 33.33 12.00 11.55
14.00 19.60 28.57 14.00 10.69 60.00
16.00 25.60 25.00 16.00 10.00 40.00
18.00 32.40 22.22 18.00 9.43
20.00 40.00 20.00 20.00 8.94 20.00
22.00 48.40 18.18 22.00 8.53
0.00
24.00 57.60 16.67 24.00 8.16 1 2 3 4 5 6 7 8 9 10 1
26.00 67.60 15.38 26.00 7.84
Ps Pd
28.00 78.40 14.29 28.00 7.56
30.00 90.00 13.33 30.00 7.30
32.00 102.40 12.50 32.00 7.07
Question 3
The supply is elastic
