The demand for private jets (x) is given by QD = 20 – (px/y) + py where px is the price of jets, py is the price of yachts and I is the average income level. (a) Is a jet a normal or inferior good? Are yachts and jets substitutes or complements ?(explain your reasoning in a sentence) At the point I = px = py =10 calculate (b) the (own) price elasticity of demand (c) the cross price elasticity of demand (demand for jets with respect to the price of yachts) (d) the income elasticity of demand
The demand for private jets (x) is given by QD = 20 – (px/y) + py where px is the price of jets, py is the price of yachts and I is the average income level. (a) Is a jet a normal or inferior good? Are yachts and jets substitutes or complements ?(explain your reasoning in a sentence) At the point I = px = py =10 calculate (b) the (own) price elasticity of demand (c) the cross price elasticity of demand (demand for jets with respect to the price of yachts) (d) the income elasticity of demand
Chapter5: Price Elasticity Of Demand And Supply
Section: Chapter Questions
Problem 17SQ
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The
where px is the
(a) Is a jet a normal or inferior good? Are yachts and jets substitutes or complements ?(explain your reasoning in a
sentence)
At the point I = px = py =10 calculate
(b) the (own)
(c) the cross price elasticity of demand (demand for jets with respect to the price of yachts)
(d) the income elasticity of demand
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