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You have been asked to analyze the market for europium. Europium is a rare earth element...

You have been asked to analyze the market for europium. Europium is a rare earth element used in a variety of electronics. You find that last year’s price for europium was $20 per ton. At this price, 100 million tons were sold on the world market. From trade association data you are able to obtain estimates for the own price elasticities of demand and supply on world markets (−0.25 for demand and 0.5 for supply elasticity). Assume linear demand and supply curves.

  1. Find the demand function for this market. First, calculate the slope of the demand function.
  2. What is the demand function? (Note: To find the demand function, you will need to solve for the parameters I have not provided values for.)
  3. Write out the supply function for this market.
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