Suppose you observe that the (equilibrium) price of copper is $2.00 per pound and the (equilibrium) quantity sold is 20 million metric tons per year. From econometric studies, you know that the price elasticity of demand for copper is -0.25 and the price elasticity of supply is 1.20.
a. Find the equation for the linear demand curve that fits this information.
b. Find the equation for the linear supply curve that fits this information.
c. What would the new equilibrium price and quantity be if supply were to increase by 20% (a 20% increase in the quantity supplied at each and every price)?