Question: 1 . Equilibrium quantity Q = 8 0 0 0 , equilibrium price P = 2 0 . Demand elasticity is - 1 . 5

1. Equilibrium quantity Q=8000, equilibrium price P=20. Demand elasticity is -1.5 Supply
elasticity is +1.2
a. Reconstruct linear demand and supply functions
b. Pick on of the interventions and analyze the impact:
i. A price floor at P=22
ii. A price ceiling at P=18
iii. A tax of 4 per unit
iv. A subsidy of 2 per unit

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