Microeconomics: Principles, Applications, and Tools (8th Edition)

Published by Prentice Hall
ISBN 10: 0-13294-886-9
ISBN 13: 978-0-13294-886-9

Chapter 5 - Elasticity: A Measure of Responsiveness - Exercises - 5.6 Using Elasticities to Predict Changes in Equilibrium Price - Page 125: 6.6a

Answer

Initial equilibrium is at $400 and 1000 units.

Work Step by Step

The initial point of equilibrium is at the midpoint of the demand curve since the price elasticity of demand is 1.
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