Question: In the short-run, a competitive market has a Demand function QD = 2277 - 57p and a Supply function QS = 1827 + 33p .

  1. In the short-run, a competitive market has a Demand functionQD = 2277 - 57pand a
  2. Supply functionQS = 1827 + 33p.
  3. i)What is the equilibrium market price and quantity?
  4. ii)In the long run, new firms enter the industry. The Demand function is
  5. unchanged but the Supply function is now QS = 1877 + 43p. What is the new equilibrium market price and quantity?

iii) What is the elasticity of demand for this good? Interpret your answer.

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