Find the price elasticity of demand at that price-quantity

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Reference no: EM131236808

Statisticalstudiesestimatethe1981supplycurveforwheatwasapproximatelyasfollows: QS=1800+240P where price is measured in nominal dollars per bushel and quantities in millions of bushels per year. These studies also indicate that in 1981, the demand curve for wheat as: QD=3550-266P.

a. Find the market-clearing quantity and price.

b. Find the price elasticity of demand at that price and quantity.

c. Suppose a drought pushes price to $4.00 a bushel. Do you expect revenue to increase or decrease? Find the price elasticity of demand at this price and corresponding quantity demanded.

Reference no: EM131236808

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