Answer and Explanation:
A. Price elasticity of demand
Price(P0) = $80 , Q0 = 20
Price(P1) = $100 , Q1 = 18
Price elasticity of demand =
![\frac{\frac{Q1-Q0}{\frac{Q1+Q0}{2} } }{\frac{P1-P0}{\frac{P1+P0}{2} } } \\\\\frac{\frac{18-20}{\frac{18+20}{2} } }{\frac{100-80}{\frac{100+80}{2} } }\\\\\frac{\frac{-2}{\frac{38}{2} } }{\frac{20}{\frac{180}{2} } }\\\\\frac{\frac{-2}{19} }{\frac{20}{90} } }\\\\-0.47](https://tex.z-dn.net/?f=%5Cfrac%7B%5Cfrac%7BQ1-Q0%7D%7B%5Cfrac%7BQ1%2BQ0%7D%7B2%7D%20%7D%20%7D%7B%5Cfrac%7BP1-P0%7D%7B%5Cfrac%7BP1%2BP0%7D%7B2%7D%20%7D%20%7D%20%5C%5C%5C%5C%5Cfrac%7B%5Cfrac%7B18-20%7D%7B%5Cfrac%7B18%2B20%7D%7B2%7D%20%7D%20%7D%7B%5Cfrac%7B100-80%7D%7B%5Cfrac%7B100%2B80%7D%7B2%7D%20%7D%20%7D%5C%5C%5C%5C%5Cfrac%7B%5Cfrac%7B-2%7D%7B%5Cfrac%7B38%7D%7B2%7D%20%7D%20%7D%7B%5Cfrac%7B20%7D%7B%5Cfrac%7B180%7D%7B2%7D%20%7D%20%7D%5C%5C%5C%5C%5Cfrac%7B%5Cfrac%7B-2%7D%7B19%7D%20%7D%7B%5Cfrac%7B20%7D%7B90%7D%20%7D%20%7D%5C%5C%5C%5C-0.47)
Price elasticity of demand = 0.47
B. Price elasticity of supply
Price(P0) = $80 , Q0 = 16
Price(P1) = $100 , Q1 = 18
Price elasticity of supply =
![\frac{\frac{Q1-Q0}{\frac{Q1+Q0}{2} } }{\frac{P1-P0}{\frac{P1+P0}{2} } } \\\\\frac{\frac{18-16}{\frac{18+16}{2} } }{\frac{100-80}{\frac{100+80}{2} } }\\\\\frac{\frac{2}{\frac{34}{2} } }{\frac{20}{\frac{180}{2} } }\\\\\frac{\frac{2}{17} }{\frac{20}{90} } }\\\\0.53](https://tex.z-dn.net/?f=%5Cfrac%7B%5Cfrac%7BQ1-Q0%7D%7B%5Cfrac%7BQ1%2BQ0%7D%7B2%7D%20%7D%20%7D%7B%5Cfrac%7BP1-P0%7D%7B%5Cfrac%7BP1%2BP0%7D%7B2%7D%20%7D%20%7D%20%5C%5C%5C%5C%5Cfrac%7B%5Cfrac%7B18-16%7D%7B%5Cfrac%7B18%2B16%7D%7B2%7D%20%7D%20%7D%7B%5Cfrac%7B100-80%7D%7B%5Cfrac%7B100%2B80%7D%7B2%7D%20%7D%20%7D%5C%5C%5C%5C%5Cfrac%7B%5Cfrac%7B2%7D%7B%5Cfrac%7B34%7D%7B2%7D%20%7D%20%7D%7B%5Cfrac%7B20%7D%7B%5Cfrac%7B180%7D%7B2%7D%20%7D%20%7D%5C%5C%5C%5C%5Cfrac%7B%5Cfrac%7B2%7D%7B17%7D%20%7D%7B%5Cfrac%7B20%7D%7B90%7D%20%7D%20%7D%5C%5C%5C%5C0.53)
Price elasticity of supply = 0.53
C. The point , where Demand and supply is equal called equilibrium price
So , $100 is equilibrium price.
D. if market price is less then equilibrium price , it is effective So, shortage (20-16) 4 units