Consider the supply function for a kind of computer, namely p=10+0,5q. Determine the arc elasticity if the price increases from R1200 to R3200 . a. |ϵ|=1 , the supply is unit elastic. The 1% change in supply is equal to 1% change in price. b. |ϵ|=1 , the supply is unit inelastic. The 1% change in supply is equal to 1% change in price. c. |ϵ|=<1 , the demand is inelastic at this price. 1% increase (or decrease) in price will cause a 0,3% decrease (or increase) in demand. d. |ϵ|=<1 , the demand is elastic at this price. 1% increase (or decrease) in price will cause a 0,3% decrease (or increase) in demand.
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Consider the supply function for a kind of computer, namely
p=10+0,5q.
Determine the arc elasticity if the
a. |ϵ|=1 , the supply is unit elastic. The 1% change in supply is equal to 1% change in price.
b. |ϵ|=1 , the supply is unit inelastic. The 1% change in supply is equal to 1% change in price.
c. |ϵ|=<1 , the
d. |ϵ|=<1 , the demand is elastic at this price. 1% increase (or decrease) in price will cause a 0,3% decrease (or increase) in demand.
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