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Explain The Meaning Of Elasticity

Submitted by • January 16, 2019

Question
1. Explain the meaning of elasticity? What are the different types of elasticities? Of what use are these elasticities to business ( in other words to Total Revenue)? (3 marks)
2. A firm supplied 3000pens at the rate of AED 10 per pen. Next month, due to a rise in the price to AED 22 per pen, the supply of the firm increased to 5000 pens. Using themid point method find the price elasticity of supply of pens.

3. The government of Dubai had been concerned about the recent explosion in apartment rental rates for low income families.To combat this problem, a proposal has been made to institute rent control that would place $850 per month ceiling on apartment rental rates. Apartment supply and demand in the market are expressed in the following equations:

Qs = - 400 + 2P Market Supply

Qd= 5,600 – 4P Market Demand

Where Q is the number of apartments and P is the rental rate

A. Calculate thee quilibrium rental rate and the equilibrium apartments rented

B. Determine the quantity

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Voted by Simon Brooke

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