Elasticity: End of Chapter Problem Suppose the elasticity of housing demand is 1 and the elasticity of housing supply is 20 in Atlanta and 0.15 in San Francisco. If the demand for housing increases by 10% in both cities, by approximately how much will prices rise in each city?

Elasticity: End of Chapter Problem Suppose the elasticity of housing demand is 1 and the elasticity of housing supply is 20 in Atlanta and 0.15 in San Francisco. If the demand for housing increases by 10% in both cities, by approximately how much will prices rise in each city?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Elasticity: End of Chapter Problem
Suppose the elasticity of housing demand is 1 and the elasticity of housing supply is 20 in Atlanta and 0.15 in San Francisco. If
the demand for housing increases by 10% in both cities, by approximately how much will prices rise in each city?
Atlanta:
0.005
Incorrect
%
San Francisco:
0.66666667
Incorrect
%

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