2) Suppose the market demand function is given as; Od=51+10P₁ -0.4P² where I is income in $1000 and P1 is price of a related good. (a) What is the relation between these two goods? (b) Calculate the income, cross price, and own price elasticities of demand if I = $50,000, P1 = $10 and P = $20. (c) At what price is demand unit elastic if I = $50,000 and P1 = $10?

2) Suppose the market demand function is given as; Od=51+10P₁ -0.4P² where I is income in $1000 and P1 is price of a related good. (a) What is the relation between these two goods? (b) Calculate the income, cross price, and own price elasticities of demand if I = $50,000, P1 = $10 and P = $20. (c) At what price is demand unit elastic if I = $50,000 and P1 = $10?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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