The demand function for bicycles in Holland has been estimated to be Q = 2;000 + 15Y - 5:5P where Y is income in thousands of euros, Q is the quantity demanded in units, and P is the price per unit. When P = 150 euros and Y = 15(000) euros, determine the following: a. Price elasticity of demand b. Income elasticity of demand

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
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Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
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Chapter3: Demand Analysis
Section: Chapter Questions
Problem 6E
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The demand function for bicycles in Holland has been estimated to be
Q = 2;000 + 15Y - 5:5P
where Y is income in thousands of euros, Q is the quantity demanded in units, and P is the price per unit. When P = 150 euros and Y = 15(000) euros, determine the following:
a. Price elasticity of demand
b. Income elasticity of demand

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