Question

true or false? 10) Assume the demand and supply functions for good X can be written...

true or false?

10) Assume the demand and supply functions for good X can be written as
Qd = 1000 - 40Px
Qs = -200 + 20Px
In this example, equilibrium price is $20 and the equilibrium quantity is 200.
Answer:
11) The price elasticity of demand is measured as the percentage change in price divided by the percentage change in quantity demanded.
Answer:
12) When the percentage change in price is greater than the corresponding change in quantity demanded, demand is inelastic.
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Homework Answers

Answer #1
Q10.
TRUE
Explanation:
At equilibrium demand =Supply
1000-40PX = -200+20Px
1200 = 60Px
Px = 20
Qty = 1000-40*20 = 200
Hence, proved
Q11.
FALSE
Explanation:
Price elasticity = % change in qty demanded/ % change in price
Q12.
TRUE.
Here the price elasticity of demand is less than 1 as the denominator is greater than numerator
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