4. Suppose the own price elasticity of demand for good X is −5, its income elasticity is-1, its advertising elasticity is 4, and the cross-price elasticity of demand between it and good Y is 3. Determine how much the consumption of this good will change if: (LOI) a. The price of good X decreases by 6 percent. b. The price of good Y increases by 7 percent. c. Advertising decreases by 2 percent. d. Income increases by 3 percent.

4. Suppose the own price elasticity of demand for good X is −5, its income elasticity is-1, its advertising elasticity is 4, and the cross-price elasticity of demand between it and good Y is 3. Determine how much the consumption of this good will change if: (LOI) a. The price of good X decreases by 6 percent. b. The price of good Y increases by 7 percent. c. Advertising decreases by 2 percent. d. Income increases by 3 percent.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

4. Suppose the own price elasticity of demand for good X is -5, its income elasticity
is-1, its advertising elasticity is 4, and the cross-price elasticity of demand between
it and good Y is 3. Determine how much the consumption of this good will change
if: (LO1)
a. The price of good X decreases by 6 percent.
b. The price of good Y increases by 7 percent.
c. Advertising decreases by 2 percent.
d. Income increases by 3 percent.

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