The coconut oil demand function (Bushena and Perloff, 1991) is Q=1,200-9.5p+16.2pp+0.2Y, where Q is the quantity of coconut oil demanded in thousands of metric tons per year, p is the price of coconut oil in cents per pound, pp is the price of palm oil in cents per pound, and Y is the income of consumers. Assume that p is initially 55 cents per pound, pp is 29 cents per pound, and Q is 1,375 thousand metric tons per year. Calculate the price elasticity of demand for coconut oil and the cross- price elasticity of demand (with respect to the price of palm oil). The price elasticity of demand is ɛ=?????? (Enter your response rounded to three decimal places and include a minus sign.) The cross-price elasticity of demand is ɛ=????? enter your response here. (Enter your response rounded to three decimal places.)

The coconut oil demand function (Bushena and Perloff, 1991) is Q=1,200-9.5p+16.2pp+0.2Y, where Q is the quantity of coconut oil demanded in thousands of metric tons per year, p is the price of coconut oil in cents per pound, pp is the price of palm oil in cents per pound, and Y is the income of consumers. Assume that p is initially 55 cents per pound, pp is 29 cents per pound, and Q is 1,375 thousand metric tons per year. Calculate the price elasticity of demand for coconut oil and the cross- price elasticity of demand (with respect to the price of palm oil). The price elasticity of demand is ɛ=?????? (Enter your response rounded to three decimal places and include a minus sign.) The cross-price elasticity of demand is ɛ=????? enter your response here. (Enter your response rounded to three decimal places.)

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter5: Income And Substitution Effects

Section: Chapter Questions

Problem 5.13P

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Green et al. (2005) estmate the supply and demand curves for Californa processod tomatoes. The supply function is: \[ \ln \left(Q_{s}\right)=0.200+0.550 \ln (p) \] whereQis the quantify of processing tomatoes in milions of tons per year andpis the price in dollars per ton. The demand function is: \[ \ln \left(Q_{d}\right)=2600-0.200 \ln (p)+0.150 \ln \left(p_{1}\right) . \] wherep1is the price of tornato paste (which is what processing tomatoes are used to produce) in dollars per ton. Supposept=$119Determine how the equilerium price and quantity of processing tomatees change if the price of tomato pasise tails by16%. If the price of tomato paste fals by18%, then the equaborium price will by 5 (Enter a numene response using a real number rounded to two decimal places)
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The coconut oil demand function (Buschena and Perloff, 1991) is Q = 1,200 - 9.5p + 16.2 pp + 0.2Y, where Q is the quantity of coconut oil demanded in thousands of metric tons per year, p is the price of coconut oil in cents per pound, Pp is the price of palm oil in cents per pound, and Y is the income of consumers. Assume that p is initially 45 ¢ per pound, Pp is 31 ¢ per pound, and Q is 1,275 thousand metric tons per year. Calculate the income elasticity of demand for coconut oil. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
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