Assume that the Demand elasticity of a good is -1 and the Supply elasticity is +2. Assume also that (i) that the price of a complement decreases and therefore Demand shifts out by +2% and (ii) because one of the inputs in production declined in price, the Supply shifts by +2%. In partial equilibrium, the % change in the equilibrium price is 000 -2% -1% 0% 1% 2%
Assume that the Demand elasticity of a good is -1 and the Supply elasticity is +2. Assume also that (i) that the price of a complement decreases and therefore Demand shifts out by +2% and (ii) because one of the inputs in production declined in price, the Supply shifts by +2%. In partial equilibrium, the % change in the equilibrium price is 000 -2% -1% 0% 1% 2%
Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter3: Supply And Demand: Theory
Section: Chapter Questions
Problem 8WNG
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![Assume that the Demand elasticity of a good is -1 and the Supply elasticity is +2.
Assume also that (i) that the price of a complement decreases and therefore Demand
shifts out by +2% and (ii) because one of the inputs in production declined in price,
the Supply shifts by +2%. In partial equilibrium, the % change in the equilibrium
price is
-2%
-1%
0%
1%
2%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fcb9d1fc9-bd13-4f01-b5d1-40e837945d2a%2F3a10cb72-516c-47af-9418-15d98d732913%2Fzpc3pbm_processed.png&w=3840&q=75)
Transcribed Image Text:Assume that the Demand elasticity of a good is -1 and the Supply elasticity is +2.
Assume also that (i) that the price of a complement decreases and therefore Demand
shifts out by +2% and (ii) because one of the inputs in production declined in price,
the Supply shifts by +2%. In partial equilibrium, the % change in the equilibrium
price is
-2%
-1%
0%
1%
2%
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