Assume that Demand and supply for a product (If all other factors remain the same) is defined by the following equations: (1 mark)
Q d = 2.5 – 0.25P
Q s = 1 + 0.5 P
a) Calculate the equilibrium price and quantity?
b) If the price changes by 2 unit, calculate demand and supply quantity?
c) Considering the combination of demand quantity and price in part a and b calculate Midpoint elasticity of demand

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Assume that Demand and supply for a product (If all other factors remain the same) is defined by the following equations: (1 mark)

Q d = 2.5 – 0.25P

Q s = 1 + 0.5 P

a) Calculate the equilibrium price and quantity?

b) If the price changes by 2 unit, calculate demand and supply quantity?

c) Considering the combination of demand quantity and price in part a and b calculate Midpoint elasticity of demand

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