Answer: 3.3%
Step-by-step explanation:
Formula:
The percentage change in equilibrium price = (percentage change in demand) / (Ed + Es) * 100%
The given parameters are:
Percentage change in demand = 10% = 0.1
Ed (Price elasticity in demand) = 1
Es (Price elasticity in supply) = 2
Therefore, substituting the given parameters into the formula above,
Percentage change in equilibrium price = 0.1/(1+2) * 100%
= 0.1/3 * 100%
= 0.03333 * 100%
= 3.33%
This means that the percentage change in equilibrium price will be 3.33% when the change in demand is 10%.
