1. The American Mining Company is interested in obtaining quick estimates of the supply and demand...

  

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1. The American Mining Company is interested in obtaining quick estimates of the supply and demand curves for coal. The firm's research department informs you that the elasticity of supply is approxi- mately 1.7, the elasticity of demand is approximately -0.85, and the current price and quantity are $41 and $1,206, respectively. Price is measured in dollars per ton, quantity is captured as number of tons per week. (a) Is demand elastic, inelastic or unit elastic? Explain. (5) (b) Write down the linear supply and demand curves at the current price and quantity. (10) (c) Using Excel, provide a graph of the demand and supply curves. Is the market in equilibrium? (5) (d) Calculate the Total Revenue, Average Revenue, and Marginal Revenue of the American Mining Company at the equilibrium price and quantity. (5) 1. The American Mining Company is interested in obtaining quick estimates of the supply and demand curves for coal. The firm's research department informs you that the elasticity of supply is approxi- mately 1.7, the elasticity of demand is approximately -0.85, and the current price and quantity are $41 and $1,206, respectively. Price is measured in dollars per ton, quantity is captured as number of tons per week. (a) Is demand elastic, inelastic or unit elastic? Explain. (5) (b) Write down the linear supply and demand curves at the current price and quantity. (10) (c) Using Excel, provide a graph of the demand and supply curves. Is the market in equilibrium? (5) (d) Calculate the Total Revenue, Average Revenue, and Marginal Revenue of the American Mining Company at the equilibrium price and quantity. (5)