Suppose that the equalibrium price of copper is 5 and the equalibrium quantity of copper is 20. At the market equalibrium, the price elasticity of demand for copper is -0.5, and the price elasticity of supply for copper is 1.0
a) is the demand for copper elastic or inelastic at the market equalibrium? explain briefly
b) assume that the supply and demand curves are linear. find the equations for supply and demand given the information above
c) suppose that the quantity of copper supplied at each price falls by 50%. what is the new equalibrium price and quantity?
d) what are the price elasticities of demand and supply at the new equalibrium?