In the regional market for housing, demand for single detached homes depends on the price of the house, P. consumer income, N. and the price of a related good, townhouses, Pr. The demand equation is Q -0.3N +0.08P, -0.02P, Initially, average consumer income is N= S60.000 and the average price of townhouses is $310,000. Making these substitutions, we get Q42.800 - 0.02P This is our current demand equation. Suppose N- 60,000 and P-255,000. If the price of townhouses decreases from $310.000 to S280,000, what is the cross-price elasticity of demand for housing? O Click the icon to view the derivation of the current demand equation. The cross price elasticity of demand for housing when N 60,000, P 255,000, and the price of townhouses decreases from $310,000 to $280,000 is Single detached homes and townhouses are substitutes. 0.66 This is inelastic. (Round to two decimal places as needed.)
In the regional market for housing, demand for single detached homes depends on the price of the house, P. consumer income, N. and the price of a related good, townhouses, Pr. The demand equation is Q -0.3N +0.08P, -0.02P, Initially, average consumer income is N= S60.000 and the average price of townhouses is $310,000. Making these substitutions, we get Q42.800 - 0.02P This is our current demand equation. Suppose N- 60,000 and P-255,000. If the price of townhouses decreases from $310.000 to S280,000, what is the cross-price elasticity of demand for housing? O Click the icon to view the derivation of the current demand equation. The cross price elasticity of demand for housing when N 60,000, P 255,000, and the price of townhouses decreases from $310,000 to $280,000 is Single detached homes and townhouses are substitutes. 0.66 This is inelastic. (Round to two decimal places as needed.)
Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter5: Elasticity Of Demand And Supply
Section: Chapter Questions
Problem 8QFR
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