0.5 - . Inelastic: 1. P1 50 P2 60 Q1 100 Q2 90

The document provides an assignment calculating point elasticity of demand, arc elasticity of demand, and equilibrium price and quantity given different scenarios. It includes computing elasticities from price and quantity data and using demand and supply equations to find the equilibrium point. The answers show the calculations and interpretations for each scenario.

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0.5 - . Inelastic: 1. P1 50 P2 60 Q1 100 Q2 90

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John Paul Barot

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Polytechnic University of the Philippines

College of Business Administration

Department of Human Resource Management
A.Y 2020-2021

BAROT, JOHN PAUL CASTILLO June 11, 2021

BSBA-HRM 2-3N Basic Microeconomics

Assignment
A. Given the following compute for Point Elasticity of Demand and Arc Elasticity of
Demand. Interpret the results.
1. P1=50 P2=60 Q1=100 Q2=90
2. P1=50 P2=60 Q1=100 Q2=100
3. P1=50 P2=50 Q1=100 Q2=90
4. P1=50 P2=55 Q1=100 Q2=40
5. P1=30 P2=10 Q1=100 Q2=90
B. Given the following compute for Equilibrium Price and Quantity.
P=10-5Qd P=3+2Qs

Answers:

A. 1. P1=50 P2=60 Q1=100 Q2=90

Q2−Q1 90−100
%/\Q Q1 100 −0.1
𝑃𝐸𝐷 = = P2−P1 = 60−50 = = |−0.5| = 𝟎. 𝟓 INELASTIC
%/\P 0.2
P1 50

Q2 − Q1 90 − 100 −10
\Q Q1 + Q2 100 + 90 190 −10
Q −.11
𝐴𝐸𝐷 = = 2 = 2 = 2 = 95 = = |−0.61| = 𝟎. 𝟔𝟏
P2 − P1 60 − 50 10 10 0.18
\P P2 + P1 60 + 50 110 55
P 2 2 2

INELASTIC
2. P1=50 P2=60 Q1=100 Q2=100
Q2 − Q1 100 − 100
%/\Q Q1 100 0
𝑃𝐸𝐷 = = = = = 𝟎 𝐏𝐄𝐑𝐅𝐄𝐂𝐓𝐋𝐘 𝐈𝐍𝐄𝐋𝐀𝐒𝐓𝐈𝐂
%/\P P2 − P1 60 − 50 0.2
P1 50
Q2 − Q1 100 − 100 0
/\Q Q1 + Q2 100 + 100 200 0
Q 2 2 2 100 0
𝐴𝐸𝐷 = = = = = = = 𝟎 𝐏𝐄𝐑𝐅𝐄𝐂𝐓𝐋𝐘 𝐈𝐍𝐄𝐋𝐀𝐒𝐓𝐈𝐂
/\P P2 − P1 60 − 50 10 10 0.18
P P2 + P1 60 + 50 110 55
2 2 2

3. P1=50 P2=50 Q1=100 Q2=90

Q2 − Q1 90 − 100
%/\Q Q1 100 −0.1
𝑃𝐸𝐷 = = = = =
%/\P P2 − P1 50 − 50 0
P1 50
(𝐜𝐚𝐧𝐧𝐨𝐭 𝐛𝐞 𝐝𝐢𝐯𝐢𝐝𝐞𝐝 𝐛𝐲 𝟎) 𝐏𝐄𝐑𝐅𝐄𝐂𝐓𝐋𝐘 𝐄𝐋𝐀𝐒𝐓𝐈𝐂
Q2−Q1 90−100 −10
/\Q Q1+Q2 100+90 190 −10
Q 2 2 2 95 −0.11
𝐴𝐸𝐷 = /\P = P2−P1 = 50−50 = 0 = 0 = =
50+50 110
0
P P2+P1 55
2 2 2
(𝒄𝒂𝒏𝒏𝒐𝒕 𝒃𝒆 𝒅𝒊𝒗𝒊𝒅𝒆𝒅 𝒃𝒚 𝟎) PERFECTLY ELASTIC

4. P1=50 P2=55 Q1=100 Q2=40

Q2−Q1 40−100
%/\Q Q1 100 −0.6
𝑃𝐸𝐷 = = P2−P1 = 55−50 = = | − 6 | = 𝟔 ELASTIC
%/\P 0.1
P1 50
Q2−Q1 40−100 −60
/\Q Q1+Q2 100+40 140 −60
Q 2 2 2 70 −0.86
𝐴𝐸𝐷 = /\P = P2−P1 = 55−50 = 5 = 5 = = |−8.6| = 𝟖. 𝟔
55+50 105
0.1
P P2+P1 52.5
2 2 2

ELASTIC
5. P1=30 P2=10 Q1=100 Q2=90
Q2 − Q1 90 − 100
%/\Q Q1 100 −0.1
𝑃𝐸𝐷 = = = =
%/\P P2 − P1 10 − 30 −0.67
P1 30
= 𝟎. 𝟏𝟓 𝐈𝐍𝐄𝐋𝐀𝐒𝐓𝐈𝐂
Q2 − Q1 90 − 100 −10
/\Q Q1 + Q2 100 + 90 190 −10
Q −0.86
𝐴𝐸𝐷 = = 2 = 2 = 2 = 95 =
/\P P2 − P1 10 − 30 −20 −20 −1
P P2 + P1 10 + 30 40 20
2 2 2
= 𝟎. 𝟖𝟔 𝑰𝑵𝑬𝑳𝑨𝑺𝑻𝑰𝑪

B. Quantity Demanded Quantity Supplied

(Assuming the price is 0) (Assuming the price is 0)
P = 10-5Qd P = 3+2Qs
P = 10-5Qd P = 3+2Qs
0 = 10-5Qd 0 = 3+2Qs
-10+0 = -5Qd -3+0 = 2Qs
-10/-5 = -5Qd/-5 -3/2 = 2Qs/2
2 = Qd -1.5 = Qs
Equilibrium Price Equilibrium Quantity
Qd = Qs Qd = Qs
a-bP = c+dP a-bP = c+dP
2-5P = -1.5+2P 2-5P = -1.5+2P
2+1.5 = 2P+5P 2 – 5 (0.5) = -1.5+2(0.5)
3.5 = 2P+5P 2-2.5 = -1.5+1
3.5/7 = 7P/7 -0.5 = -0.5
0.5 = P