Sam is rich and at this high income level, her demand for good X is independent of income and given by X*=46.4- 3 px/Py where px and py denote respectively the price of good X and the price of good Y. Assuming the price of good Y is equal to 4.1, find the value of the price of good X at which the own-price elasticity of Sam's demand is equal to -3.
Sam is rich and at this high income level, her demand for good X is independent of income and given by X*=46.4- 3 px/Py where px and py denote respectively the price of good X and the price of good Y. Assuming the price of good Y is equal to 4.1, find the value of the price of good X at which the own-price elasticity of Sam's demand is equal to -3.
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter6: Consumer Choices
Section: Chapter Questions
Problem 15CTQ: Income Effects depend on the income elasticity of demand for each good limit you buy. If one of the...
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