Q1. If demand is elastic, will shifts in supply have a larger effect on equilibrium quantity or on price?
Q2. If demand is inelastic, will shifts in supply have a larger effect on equilibrium price or on quantity?
Q3. If supply is elastic, will shifts in demand have a larger effect on equilibrium quantity or on price?
Q4. If supply is inelastic, will shifts in demand have a larger effect on equilibrium price or on quantity?
Q5. A city has built a bridge over a river, and it decides to charge a toll to everyone who crosses. For one year, the city charges a variety of different tolls and records information on how many drivers cross the bridge. The city thus gathers information about elasticity of demand. If the city wishes to raise as much revenue as possible from the tolls, where will the city decide to charge a toll? In the inelastic portion of the demand curve, the elastic portion of the demand curve, or the unit elastic portion? Explain.
Q6. Say that a certain stadium for professional football has 70,000 seats. What is the shape of the supply curve for tickets to football games at that stadium? Explain.