ECON 261 Study Guide - Final Guide: Oatmeal, Demand Curve, Economic Equilibrium
Document Summary
The price elasticity of demand for oatmeal is constant and equal to 1. When the price of oatmeal is per unit, the total amount demanded is 6,000 units: write an equation for the demand function. q = 60, 000/p. Graph this demand function below with blue ink. (hint: if the demand curve has a constant price elasticity equal to _, then d(p) = ap_ for some constant a. Show the supply curve on your graph and label the equilibrium with an e. (c) suppose that the demand curve shifts outward by 10%. Write down the new equation for the demand function. q = 66, 000/p. Suppose that the supply curve remains vertical but shifts to the right by 5%. Use red ink to draw the new demand curve and the new supply curve on your graph. (e) suppose that in the above problem the demand curve shifts outward by x% and the supply curve shifts right by y%.
