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### Course: Microeconomics>Unit 3

Lesson 2: Price elasticity of supply

# Price elasticity of supply determinants

Explore what makes supply more or less elastic in this video.

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• The market demand curve for good Y is given as Y=8Py*-2 , where Y is market quantity demanded for good Y and Y P is price of good Y in dollar.
what is the value of own price elasticity demand for good y
• To find the own price elasticity of demand (PED) for good Y, we can use the following formula:

PED = change in quantity demanded/change in price

Given the demand function for good Y is Y = 8Py^-2, we need to differentiate the demand function with respect to price (P_y) to find the derivative which will give us the rate of change of quantity demanded with respect to price, which is essentially the percentage change.

Taking the derivative with respect to Py:

dY/dPy = 16Py^-3

Now, to find the percentage change in quantity demanded and price, we use:

% change in quantity demanded = (dy/y) x 100
% change in price = (dPy/Py) x 100

Now, let's find the value of PED:

PED = -16Py^-3 / 8Py^-2
PED = (-16/8)Py^-3+2
PED = -2Py^-1

So, the own price elasticity of demand for good Y is -2Py^-1
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