Question Two a) Consider the following demand function for good a Qa = 200 – 4Pa + 2P, + 0.2Y Where: Qa =Quantity of good a in demand Pa = Price of good a P, =Price of some related good r Y =Income Given Pa =20; P, = 24; Y = 2000 find the following elasticities and interpret your results i) Income elasticity of demand ii) Own price elasticity of demand iii) Cross-price elasticity of demand

Question Two a) Consider the following demand function for good a Qa = 200 – 4Pa + 2P, + 0.2Y Where: Qa =Quantity of good a in demand Pa = Price of good a P, =Price of some related good r Y =Income Given Pa =20; P, = 24; Y = 2000 find the following elasticities and interpret your results i) Income elasticity of demand ii) Own price elasticity of demand iii) Cross-price elasticity of demand

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

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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