Consider a market with a demand curve of P = 164–q and a supply curve of P = 3q. What is the price elasticity of supply at the market equilibrium?

Question

Consider a market with a demand curve of P = 164–q and a supply curve of P = 3q. What is the price elasticity of supply at the market equilibrium?
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Solution 1

To find the price elasticity of supply at the market equilibrium, we first need to find the equilibrium price and quantity.

Step 1: Set the demand and supply equations equal to each other to find the equilibrium quantity (q).

164 - q = 3q

This simplifies to:

4q = 164

So, q = 41.

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