The Calculus of Equilibrium and ElasticitiesSuppose that the quantity supplied of TV stands is represented byQS = 8P 20P; - 200where P is the price of a stand, and P; is the price of hardware inputs. Quantity demanded isQD = 4,700 2P + 0.5Iwhere I is income. Assume that in equilibrium income is $1,000, and the hardware price is $5. The equilibrium quantity, giventhese specifications, is 4,100.Round answers to three places after the decimal.a. Calculate the income elasticity of demand using calculus.ED.0.122b. Calculate the input elasticity of supply using calculus.ES: -0.024

the elasticity of demand measures the quantitative relationship between the price and quantity…

The Calculus of Equilibrium and Elasticities Suppose that the quantity supplied of TV stands is represent QS = 8P 20P₁ - 200 - where P is the price of a stand, and P; is the price of hardwar QD = 4,700 - 2P+0.51 where I is income. Assume that in equilibrium income is $1, hese specifications, is 4,100. Round answers to three places after the decimal.

The Calculus of Equilibrium and Elasticities Suppose that the quantity supplied of TV stands is represent QS = 8P 20P₁ - 200 - where P is the price of a stand, and P; is the price of hardwar QD = 4,700 - 2P+0.51 where I is income. Assume that in equilibrium income is $1, hese specifications, is 4,100. Round answers to three places after the decimal.

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Normal and Inferior Goods

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Question

The Calculus of Equilibrium and Elasticities
Suppose that the quantity supplied of TV stands is represented by
QS = 8P 20P; - 200
where P is the price of a stand, and P; is the price of hardware inputs. Quantity demanded is
QD = 4,700 2P + 0.5I
where I is income. Assume that in equilibrium income is $1,000, and the hardware price is $5. The equilibrium quantity, given
these specifications, is 4,100.
Round answers to three places after the decimal.
a. Calculate the income elasticity of demand using calculus.
ED.
0.122
b. Calculate the input elasticity of supply using calculus.
ES: -0.024

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