Demand for Orange Juice is given as  Qd = 5000 – 2500 P + 1200 I + 650 E – 255 Ps Suppose Income is I = Rs.500, Expectations E = 55, and Price of Ps = Rs 25. Find the Demand Equation. Using the demand function from part a., Calculate Elasticity of Demand for price range of Rs.125 and Rs.155. C.What will be the ‘Price Elasticity of Demand’ at P = Rs.125?

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
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Chapter4: Estimating Demand
Section: Chapter Questions
Problem 6E
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Demand for Orange Juice is given as 

Qd = 5000 – 2500 P + 1200 I + 650 E – 255 Ps

Suppose Income is I = Rs.500, Expectations E = 55, and Price of Ps = Rs 25.

  1. Find the Demand Equation.
  2. Using the demand function from part a.,

Calculate Elasticity of Demand for price range of Rs.125 and Rs.155.

C.What will be the ‘Price Elasticity of Demand’ at P = Rs.125?

D.Interpret the Elasticity of Demand calculated in (C) above

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