Corrigendum

Dear Students of ECO4021 In lecture 05 handouts, there is a typing mistake in the example of Market for wheat. The corrected example in lecture 05 handouts of ECO402 is as under:
THE MARKET FOR WHEAT – 1981 Supply Curve for Wheat – QS = 1,800 + 240P – 1981 Demand Curve for Wheat – QD = 3,550 - 266P – Equilibrium: Q S = Q D 1,800 + 240 P = 3, 550 − 266 P 506 P = 1, 750 P = 3.46 / bushel Q = 1,800 + (240)(3.46) = 2, 630 million bushels
D EP =

P ∆QD Q ∆P =

=

3.46 2, 630

( −266) = −.035 Inelastic

S EP =

P ∆QS Q ∆P

3.46 2, 630

(240) = .032 Inelastic

Assume the price of wheat is $4.00/bushel QD = 3, 550 − (266)(4.00) = 2, 486
D QP =

4.00 2, 486

(−266) = −0.43

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