The market supply curve of shoes is given by QS=350,000+10,000P. The demand for shoes can be segmented into two components. The first component is the demand for shoes by local buyers. This demand is given by qA=270,000- 2,500P. The second component is the demand for gloves by foreign buyers. This demand is given by qB=350,000-20,000P. (a) Derive the total market demand function for shoes. Find the equilibrium market price and quantity. a. .., (b) At the equilibrium price, what is the price elasticity of demand?.

The market supply curve of shoes is given by QS=350,000+10,000P. The demand for shoes can be segmented into two components. The first component is the demand for shoes by local buyers. This demand is given by qA=270,000- 2,500P. The second component is the demand for gloves by foreign buyers. This demand is given by qB=350,000-20,000P. (a) Derive the total market demand function for shoes. Find the equilibrium market price and quantity. a. .., (b) At the equilibrium price, what is the price elasticity of demand?.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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