. Consider the market for umbrellas in Pasadena. P= 125-40⁰ P = 25+ QS a. What is the equilibrium price and quantity of umbrellas in this market? b. If the government sets the price for umbrellas at $80, describe the affect this will have on the quantity sold, and indicate if this is a price ceiling or a price floor. c. What is the elasticity of demand at the equilibrium if the price increases by $10? d. Is demand elastic, inelastic or unit elastic?

. Consider the market for umbrellas in Pasadena. P= 125-40⁰ P = 25+ QS a. What is the equilibrium price and quantity of umbrellas in this market? b. If the government sets the price for umbrellas at $80, describe the affect this will have on the quantity sold, and indicate if this is a price ceiling or a price floor. c. What is the elasticity of demand at the equilibrium if the price increases by $10? d. Is demand elastic, inelastic or unit elastic?

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter5: Elastic And Its Application

Section: Chapter Questions

Problem 5CQQ: An increase in the supply of a good will decrease the total revenue producers receive if a. the...

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