Figure 2.5.6
-In order to fit linear supply and demand curves to data, we need to find the parameters, a, b, c, and d, of the corresponding functions. One procedure for finding those values uses the known values of:
A) the demand equation and income elasticity of demand.
B) the price and quantity of equilibrium and the elasticities of supply and demand.
C) any two known values of price and quantity and income elasticity of demand.
D) the price elasticity of demand and supply and the income elasticity of demand.

Question

Figure 2.5.6
-In order to fit linear supply and demand curves to data, we need to find the parameters, a, b, c, and d, of the corresponding functions. One procedure for finding those values uses the known values of:
A) the demand equation and income elasticity of demand. 
B) the price and quantity of equilibrium and the elasticities of supply and demand. 
C) any two known values of price and quantity and income elasticity of demand. 
D) the price elasticity of demand and supply and the income elasticity of demand.

Quizplus · Accepted Answer

In order to fit linear supply and demand curves, we need to know the equilibrium price and quantity, as well as the elasticities of both supply and demand. Therefore, option B is the correct choice as it includes both of these necessary pieces of information.

Figure 2.5.6 -In Order to Fit Linear Supply and Demand Curves to Curves