Imagine sam discovers a new production technique

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Q1. Use this information to answer the next three questions. Sam sells shavers also Alvin sells after cut off. Imagine Sam discovers a new production technique that lowers his costs of production, shifting the supply curve for shavers to the right. This causes the equilibrium price of shavers to fall from $30 to $22 also the equilibrium quantity to increase from 40 to 50 shavers. Illustrate what is the coefficient of price elasticity of demand (Ed) for shavers

Q2. "Patent systems can be worthwhile if induced innovations are important also if the rewards from patents speed them up." Explain why this statement is true.

Reference no: EM139557

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