Consider the demand function for good1, Q1 = 726 - P1 + 0.75* P2 - 0.5* P3 + 0.05*YWhere, price of good1 (P1) is 223, price of good2 (P2) is 81, price of good3 (P3) is 526, and income (Y) is 16511;Find the price elasticity of demand (PED). (Give your answer to two decimal places)Find the income elasticity of demandED) (Give your answer to two decimal places).Find the cross price elasticity of demand (XED) between good1 and good2. (Give your answer to two decimal places)Find the cross price elasticity of demand (XED) between good 1 and good 3. (Give your answer to two decimal places)

Answered: Image /qna-images/answer/7294bb24-95ae-4aed-b356-897f30bb0e08.jpg

Consider the demand function for good1, Q1 = 726 - P1 + 0.75* P2 - 0.5* P3 + 0.05*Y Where, price of good1 (P1) is 223, price of good2 (P2) is 81, price of good3 (P3) is 526, and income (Y) is 16511; Find the price elasticity of demand (PED). (Give your answer to two decimal places) Find the income elasticity of demand (YED) (Give your answer to two decimal places). Find the cross price elasticity of demand (XED) between good1 and good2. (Give your answer to two decimal places)

Consider the demand function for good1, Q1 = 726 - P1 + 0.75* P2 - 0.5* P3 + 0.05*Y Where, price of good1 (P1) is 223, price of good2 (P2) is 81, price of good3 (P3) is 526, and income (Y) is 16511; Find the price elasticity of demand (PED). (Give your answer to two decimal places) Find the income elasticity of demand (YED) (Give your answer to two decimal places). Find the cross price elasticity of demand (XED) between good1 and good2. (Give your answer to two decimal places)

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter5: Elasticity Of Demand And Supply

Section: Chapter Questions

Problem 1.1P: (Calculating Price Elasticity of Demand) Suppose that 50 units of a good are demanded at a price of...

See similar textbooks

Similar questions

(Calculating Price Elasticity of Demand) Suppose that 50 units of a good are demanded at a price of Si per unit. A reduction in price to $0.20 results in an increase in quantity demanded to 70 units. Using the midpoint formula, show that these data yield a price elasticity of 0.25. By what percentage would a 10 percent rise in the price reduce the quantity demanded, assuming price elasticity remains constant along the demand curve?
Estimates presented in Exhibit 5 show that Android users have a higher price elasticity of demand for apps in the Google Play Store than do iPhone users in the Apple App Store. Why might Android users tend to be more sensitive to app prices than iPhone users? What categories or types of apps (for example, games/social media) do you think have the highest price elasticities?
Prove that price elasticity of demand is not the same as the slope of a demand curve.
If automobiles and gasoline are complements, then their cross-elasticity coefficient is a. strictly greater than 1. b. positive. c. equal to zero. d. negative.
Suppose a straight-line downward-sloping demand curve shifts rightward. Is the price elasticity of demand higher, lower, or the same between any two prices on the new (higher) demand curve than on the old (lower) demand curve?
If a decrease in the price of movie tickets increases the total revenue of movie theaters, this is evidence that demand is a. price elastic. b. price inelastic. c. unit elastic with respect to price. d. perfectly inelastic.