(Solved): neec help with all thank you 1. Consider the market for Widgets. Suppose that the equation for the s ...

1. Consider the market for Widgets. Suppose that the equation for the supply curve is: \( \mathrm{Q}_{\mathrm{s}}=2,000 \mathrm{P}-10,000 \), and the equation for the demand curve is: \( \mathrm{Q}_{\mathrm{d}}=40,000-3,000 \mathrm{P} \). It turns out that the equilibrium price is 10 , while the equilibrium quantity is 10,000 . a. Use a \( 10 \% \) increase in quantity to estimate (crudely) both the elasticity of supply and the elasticity of demand at the equilibrium quantity. i) Categorize supply and demand as elastic or inelastic at the equilibrium quantity. ii) Is supply or demand relatively more inelastic at the equilibrium quantity? b. If the government enacted a tax of \( \$ 5 \), the loss in consumer surplus would be 14,000 , while the loss in producer surplus would be 21,000 (see Homework 2, question #2.) Compare this information to your answer to part (a). Explain. c. Now estimate (crudely) the elasticity of demand at a quantity of 11,000 by decreasing quantity by 1,000 . Compare your estimate of elasticity to the estimate in part (a). Comment.