Chapter 3 Notes
Popular in Intermediate Microeconomics
Popular in Economcs
This 1 page Bundle was uploaded by Nicole Rossi on Friday January 22, 2016. The Bundle belongs to at Rowan University taught by Lauren Banko in Fall 2015. Since its upload, it has received 18 views. For similar materials see Intermediate Microeconomics in Economcs at Rowan University.
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Date Created: 01/22/16
to find the price elasticity of supply: plug in market price or quantity into equation and then once you have the market price and quantity, do p/q(coefficient on p) if that number is positive it will lead to an increase in price, then use the price elasticity*the percentage increase in price to find how much the quantity will rise If the government poses a specific tax, it will raise revenue if the curve is more inelastic because consumers are less sensitive to price. the equilibrium price after a specific tax will be the same whether the tax is collected from consumers or producers., therefore the same tax revenue is raised to determine the after tax equilibrium price: take the market demand equation and the after tax supply curve, set em equal, solve for p to find income elasticity, follow the same pattern as regular elasticity, but then plug in p/q(income coefficient) so plug in income/quantity(coefficient of income) cross price elasticity is positive=substitutes cross price elasticity is negative=complementary
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