d

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter6: Elasticity

Section6.4: The Relationship Between Taxes And Elasticity

Problem 1ST

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Question

Cross-price elasticity between robots and
drones is - 2.5 when the price of drones
drops. Explain what this means in terms of
the relationship between the two products.
The forecast is that the price of drones will
keep dropping - what advice would you
have for the robot maker? Why?

Compute the income elasticity and determine the type of good given the
following.
Турe of
Good
Y
Qd
%AQ
%AY
Ey
400
20
500
35
600
43
700
47
800
50
900
48
1000
47

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