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  • Problem Set #1

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    romapatricia_silva
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    If the quantity demanded of compact discs falls by 10 percent when its price increases by 5 percent, what is the own price elasticity of demand for compact discs? How does the market adjust when there is disequilibrium; i.e when there is a shortage of supply?

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    If the quantity demanded of compact discs falls by 10 percent when its price increases by 5 percent, what is the own price elasticity of demand for compact discs? How does the market adjust when there is disequilibrium; i.e when there is a shortage of supply?

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    Attribution Non-Commercial (BY-NC)
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    17 views1 page

    Problem Set #1

    Uploaded by

    romapatricia_silva
    If the quantity demanded of compact discs falls by 10 percent when its price increases by 5 percent, what is the own price elasticity of demand for compact discs? How does the market adjust when there is disequilibrium; i.e when there is a shortage of supply?

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
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    PROBLEM SET 1: 1. What will happen to equilibrium price and quantity if a typhoon destroys the rice fields in Pampanga?

    How about if consumers tastes shift from pandesal to bagels? 2. Distinguish between a shift in the supply curve versus a movement along the curve. 3. If the quantity demanded of compact discs falls by 10 percent when its price increases by 5 percent, what is the own price elasticity of demand of compact discs? 4. Solve for the equilibrium price and quantity given: Qd = 240 2P Qs = -60 + 3P 5. How does the market adjust when there is disequilibrium; i.e when there is a shortage of supply?
    *Deadline: July 6, 2011 *Answer Problem Set 1 by group *Group outputs must be written in a yellow pad paper *Group 1 will present their answers in class

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