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Calculate the elasticity of demand for january and march

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Reference no: EM132473370

Consider the following sequence of changes in the demand and supply for Uber service in Raleigh. The price P is a price per mile, while the quantity is the total length of uber rides over a month (in '000 miles).

January: Initial demand and supply are given by the equations qd=160-30p and qs= 30p-20.

February: Due to higher prices of gasoline, the supply of uber service changed to qs=30p-80(when P>=2)

March: Over the spring break, the demand for uber service was higher and therefore the demand curve was given by the equation qd=140-20p

(a) For each month find the equilibrium price and quantity.

(b) Illustrate your answer with a graph. Show the equilibrium prices and quantities on the graph.

(c) Calculate the elasticity of demand for January and March using the corresponding equilibrium price and quantity.

(d) Which month is the demand for uber service more elastic?

(e) Calculate the consumer surplus for each month.

Reference no: EM132473370

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