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There is a mistake in Zero profits in the long run:
While in the short run there is a price decrease due to a right shift in the demand curve (a),
While in the short run there is a price increase due to a right shift in the demand curve (a),
yes you have to use the formula for price elasticity of demand: which is the derivative of the demand curve times (price/ quantity).
so for this one it is -4*(2/15). you will get a negative answer but you can take the absolute value so let fall the minus. I hope this helps you.
But as I explained when you get a negative number for the demand curve you have to consider that the demand is equal to zero. Just think about it if you are selling cookies, one guy tells you he wants to buy 4 cookies , and another guy says he wants to buy -2 cookies. You are still gonna sell 4 cookies to the first guy and none to the second guy . so the demand will be 4.
Compare the quantity as well.
Get the quantity of supply and demand by plugging in the foreign P to the domestic demand and supply function
Q demand = 12
S demand = 5
Then plug the numbers into the formula
= Diff between import and export * Diff between price of foreign and domestic * (1/2) (because its a triangle)
= (12 - 5) * (7-6) * (1/2)
hope this helps
It is D, because the outcome of equilibrium price in the entire country, which is 62.5, gives a negative demand in the south (1000-20*62.50). Hence you are best off to use the demand function of the northern part, setting it equal to the supply function of the entire country, which gives 4000-20P=40P -> P=66.67. Check task 4 of the tutorials, there was a similar exercise, pretty sure it's on studydrive somewhere.
Set current supply and demand equal gives w=5, before the economy shock there is a labor demand of 100-(14*5)=30. Wage is downwardly rigid so has to stay 5 after the shock, after the shock there is a decrease in level of employment by 5, that means the new formula for labor demand has to have outcome 25 with w=5. Answer b is the only one that suffices.