Calculate the price elasticity of demand and price elasticity of supply at the equilibrium price and quantity.   2) Due to Covid lockdowns, interstate transportation becomes difficult. Meanwhile, construction work is viewed as essential and therefore not affected by lockdowns. Use a demand and supply graph to explain how the lockdowns affect the equilibrium price and quantity.   3) Bushfires are more likely to happen in summer. If a bushfire happens again in the coming summer, how would you expect it to affect the timber market

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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TIMBER CRUNCH

The demand and the supply of timber for construction in Australia are given by 

QD =120 - 20P 
QS = 40P 

We assume the market is perfectly competitive.

 

1) Calculate the price elasticity of demand and price elasticity of supply at the equilibrium price and quantity.

 

2) Due to Covid lockdowns, interstate transportation becomes difficult. Meanwhile, construction work is viewed as essential and therefore not affected by lockdowns. Use a demand and supply graph to explain how the lockdowns affect the equilibrium price and quantity.

 

3) Bushfires are more likely to happen in summer. If a bushfire happens again in the coming summer, how would you expect it to affect the timber market?

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