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A vegetable fiber is traded in a competitive world market, and the world price is $9 per pound. Unlimited quantities are available for import into the United States at this price. The U.S. domestic supply and demand for various price levels are shown below.
Price
U.S. Supply
U.S. Demand
(million lbs.)
3
2
34
6
4
28
9
22
12
8
16
15
10
18
a. What is the equation for demand? What is the equation for supply?
b. At a price of $9, what is the price elasticity of demand? What is it at price of $12?
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