Suppose the own price elasticity of demand for good X is -3, its income elasticity is 1, its advertising elasticity is 2, and the cross-price elasticity of demand between it and good Y is -4. Determine how much the consumption of this good will change if: Instructions: Enter your responses as percentages. Include a minus (-) sign for all negative answers. a. The price of good X decreases by 5 percent.  percent b. The price of good Y increases by 8 percent.  percent c. Advertising decreases by 4 percent.  percent d. Income increases by 4 percent.  percent

Question

Suppose the own price elasticity of demand for good X is -3, its income elasticity is 1, its advertising elasticity is 2, and the cross-price elasticity of demand between it and good Y is -4. Determine how much the consumption of this good will change if:

Instructions: Enter your responses as percentages. Include a minus (-) sign for all negative answers.

a. The price of good X decreases by 5 percent.

 percent

b. The price of good Y increases by 8 percent.

 percent

c. Advertising decreases by 4 percent.

 percent

d. Income increases by 4 percent.

 percent

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