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To estimate the percent change in price from a shift in the supply curve, we can use this formula (there is a minus sign in front of the formula): percent change in supply elasticity of demand +elasticity of supply Suppose supply decreases by 10%, the elasticity of demand is -0.5 and elasticity of supply is 1.5. What happens to the market price? None of the answers are correct The market price falls by 5% The market price rises by 10% The market price rises by 5%.

To estimate the percent change in price from a shift in the supply curve, we can use this formula (there is a minus sign in front of the formula): percent change in supply elasticity of demand +elasticity of supply Suppose supply decreases by 10%, the elasticity of demand is -0.5 and elasticity of supply is 1.5. What happens to the market price? None of the answers are correct The market price falls by 5% The market price rises by 10% The market price rises by 5%.

Exploring Economics
Exploring Economics
8th Edition
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:Robert L. Sexton
Chapter6: Elasticities
Section: Chapter Questions
Problem 6P: Explain why using the midpoint formula for calculating the elasticity of demand gives the same...
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To estimate the percent change in price from a shift in the supply curve, we can use this formula (there is a minus sign in front of the formula): percent change in supply elasticity of demand + elasticity of supply Suppose supply decreases by 10%, the elasticity of demand is -0.5 and elasticity of supply is 1.5. What happens to the market price? None of the answers are correct The market price falls by 5% The market price rises by 10% The market price rises by 5%.
Transcribed Image Text:To estimate the percent change in price from a shift in the supply curve, we can use this formula (there is a minus sign in front of the formula): percent change in supply elasticity of demand + elasticity of supply Suppose supply decreases by 10%, the elasticity of demand is -0.5 and elasticity of supply is 1.5. What happens to the market price? None of the answers are correct The market price falls by 5% The market price rises by 10% The market price rises by 5%.
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