5. The demand equation for a good is given by the equation:Q, = 520 – 20P, + 0.6Y + 2.9P,a. Find the price, income and cross price elasticity of demand when P, = 10, Y == 21700 andb. Discuss the effect on demand if there were a 20% increase in pricec. Discuss the effect on demand if there were a 50% decrease in income

here the demand equation is:- Qx=520-20Px+0.6Y+2.9Py where,Px=10Y=700Py=21 So,…

5. The demand equation for a good is given by the equation: Q₁ = 520-20P, +0.6Y +2.9P, a. Find the price, income and cross price elasticity of demand when P, =10, Y = 700 and P₁ = 21 b. Discuss the effect on demand if there were a 20% increase in price c. Discuss the effect on demand if there were a 50% decrease in income

5. The demand equation for a good is given by the equation: Q₁ = 520-20P, +0.6Y +2.9P, a. Find the price, income and cross price elasticity of demand when P, =10, Y = 700 and P₁ = 21 b. Discuss the effect on demand if there were a 20% increase in price c. Discuss the effect on demand if there were a 50% decrease in income

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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3. Suppose a 10% increase I price of a different product (such y), has resulted in a 30% decrease in the demand for OUR product (say, product X). What can you tell about cross elasticity of demand? (Calculate and demonstrate your answer). Are x and y substitutes or complement? Why?
Suppose that demand schedule for discs is represented in the table below. PRICE ($) 8 10 QUANTITY DEMANDED (INCOME $10,000) 40 32 QUANTITY DEMANDED (INCOME $12,000) 50 46 If your income is $12,000, use the midpoint method to calculate your price elasticity of demand as the price of compact discs increases from $8 to $10. Select one: O a. The price elasticity of demand for discs is equal to -1.25 and demand is elastic. b. The price elasticity of demand for discs is equal to -1 and demand is inelastic. c. The price elasticity of demand for discs is equal to -0.375 and demand is inelastic. Od. The price elasticity of demand for discs is equal to -1 and demand is unit elastic.
4-6 Suppose that the price of croissants rises from $2 to $3 per unit. Use the mid-point approach to get the elasticity. answer the following The quantity of orange juice purchased falls from 10 million bottles to 5 million bottles. What is the cross-price elasticity of demand between croissants and orange juice? Are they complements or substitutes? The quantity of jelly purchased increases from 10 million jars to 20 million jars. What is What is the cross-price elasticity of demand between croissants and jelly? Are they complements or substitutes?
4. Derive the ordinary demand curve. Calculate the own-price and cross price elasticities for U = 3x + 2y at Px = 2, Py= 1 and m = 12. Graph the Demand curve.
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Please answer attached
Which one of the following pairs of goods is likely to have a negative cross-price elasticity of demand? O coffee and cream O soda and water O tea and coffee O spaghetti and ravioli O tennis shoes and flip-flops
1. Calculate the Price elasticity of demand, & for the following examples: a) Demand is given by Q = 50 – P at the price of $10. b) Demand is given by Q= 100 - P, at the price of $50. %3D c) Demand is given by Q= 25 - .25P, at the price of $40. d) Demand is given by Q = 20 - .1P, at the price of $80. e) Demand is given by Q = 60 – 1/3P, at the price of $60.