Calculate the elasticity of demand when an increase in supply causes the equilibrium price and quantity to change from $9 and 2,000 to $7 and 3,000, respectively

Elasticity of demand = Percentage change in quantity demanded/Percentage change in price. Using the average quantities and average prices to calculate elasticity, we obtain an elasticity of 5/3, or 1.66.

Economics

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The U.S. Postal Service expenditures are off-budget

a. True b. False

Economics

A farmer uses L units of labor and K units of capital to produce Q units of corn using a production function F(K,L). A production plan that uses K' = L' = 10 to produce Q' units of corn where Q' < F(10, 10 ) is said to be

A) technically feasible and efficient. B) technically unfeasible and efficient. C) technically feasible and inefficient. D) technically unfeasible and inefficient. E) none of the above

Economics