Instruction:

Simply put a rough answer will be fine for me for each question, no steps or explanation needed.

Problem 3 (Elasticity of demand) Consider the demand function D(p) = 2/ 1.06 and the supply function 8 (p) = pp where e > 1 and p > 1. 1. Find utility and cost functions consistent with the demand and supply function. 2. Show that the point-price elasticities of demand and supply are constant and equal to E and p respectively (constant elasticty of demand/supply). 3. For given values 6 and p, calculate the competitive equilibrium price and quantity. 4. Illustrate your solution in a diagramme, and explain what happens as we vary elasticity of supply p, but keep 6 xed