I want to calculate short-term and long-term price elasticity, how would I go about doing so?S1 and D1 are short term, S2 and D2 are long term. Equilibrium is at 1.5k at 140. Rent(per month)Market rent = $1,500Rent control = $1,000--E100 120 140 160 180s.sr525LPLOKSoprQuantity(one-bedroomapartments)

Answered: Rent (per month) Market rent = $1,500-…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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I want to calculate short-term and long-term price elasticity, how would I go about doing so?
S1 and D1 are short term, S2 and D2 are long term. Equilibrium is at 1.5k at 140.

Rent
(per month)
Market rent = $1,500
Rent control = $1,000-
-
E
100 120 140 160 180
s.sr
525L
PLOK
Sopr
Quantity
(one-bedroom
apartments)

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Step 1

Introduction

Price elasticity of demand tells how much price is responsive to demand whereas price elasticity of supply states how much price is responsive to supply. Less than 0.5 shows that demand and supply will be inelastic. Equal to 1 shows that supply and demand will be unitary elastic. Greater than 1 shows that demand and supply will be elastic.

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