Consider the demand function for good1, Q1 = 681 - P1 + 0.75* P2 - 0.5* P3 + 0.05*Y Where, price of good1 (P1) is 200, price of good2 (P2) is 92, price of good3 (P3) is 399, and income (Y) is 18937; (i) Find the price elasticity of demand (PED). (Give your answer to two decimal places) (ii) Find the income elasticity of demand (YED) (Give your answer to two decimal places). (iii) Find the cross price elasticity of demand (XED) between good1 and good2. (Give your answer to east two decimal places) (iv) Find the cross price elasticity of demand (XED) between good 1 and good 3. (Give your answer to two decimal places) (v) Estimate the percentage change in the demand for good1 resulting from a 10% decrease in the price of good3. (Give your answer to two decimal places, if required and do not use % sign in your answer)
Consider the
Where,
(i) Find the
(ii) Find the income elasticity of demand (YED) (Give your answer to two decimal places).
(iii) Find the cross price elasticity of demand (XED) between good1 and good2. (Give your answer to east two decimal places)
(iv) Find the cross price elasticity of demand (XED) between good 1 and good 3. (Give your answer to two decimal places)
(v) Estimate the percentage change in the demand for good1 resulting from a 10% decrease in the price of good3.
(Give your answer to two decimal places, if required and do not use % sign in your answer)
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