For the demand function Q = 700 – 7P + 3A +0.008Y2 where P is the price of the good, A is the alternative price of an alternative good, and Y the income of the consumers. When P = 6, A = 3 and Y = 90 1. the price elasticity of demand is 2. the cross-price elasticity of demand is 3. the income elasticity of demand is 4. Is the good superior or inferior? 5. Is the alternative good is a substitute or a complement? Enter non-integer numerical values as decimals to at least 3 decimal places. Note: you must use a. and not, for a decimal point.
For the demand function Q = 700 – 7P + 3A +0.008Y2 where P is the price of the good, A is the alternative price of an alternative good, and Y the income of the consumers. When P = 6, A = 3 and Y = 90 1. the price elasticity of demand is 2. the cross-price elasticity of demand is 3. the income elasticity of demand is 4. Is the good superior or inferior? 5. Is the alternative good is a substitute or a complement? Enter non-integer numerical values as decimals to at least 3 decimal places. Note: you must use a. and not, for a decimal point.
Chapter20: Elasticity: Demand And Supply
Section: Chapter Questions
Problem 13E: Using the following equation for the demand for a good or service, calculate the price elasticity of...
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Transcribed Image Text:For the demand function
Q = 700 – 7P + 3A +0.008Y²
where P is the price of the good, A is the alternative price of an alternative good, and Y the income of
the consumers.
When P = 6, A = 3 and Y = 90
1. the price elasticity of demand is
2. the cross-price elasticity of demand is
3. the income elasticity of demand is
4. Is the good superior or inferior?
5. Is the alternative good is a substitute or a complement?
Enter non-integer numerical values as decimals to at least 3 decimal places. Note: you must use a. and
not, for a decimal point.
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