Market Supply Flashcards
1
Q
What is market supply
A
sum what what the firms in the market produce, s(p), n firms
2
Q
What is the equation for Price Elasticity of Supply
A
PES = P/s(p) * ds(p)/d(p)
3
Q
What is elastic PES?
A
|Es| > 1
4
Q
What is inelastic PES?
A
|Es| < 1
5
Q
What is unit elastic PES?
A
|Es| = 1
6
Q
What is equilibrium price (p*)
A
price at which demand equals supply
7
Q
What is the equation for quantity tax
A
Pd = Ps + t
8
Q
What is the equation for ad valorem tax
A
Pd = (1+t)Ps
