Assume that the percentage increase in the price of product X ( %ΔPx) is 4% and the percentage change in quantity demanded in product Y ( %Δqd) is -5%, find the cross price elasticity (Eyx), are product X and Y substitutes or complements? 3) Assume that the percentage increase in income (%ΔI) is 4% and the percentage decrease in the quantity demanded (%Δq) is -6%, find income elasticity (EI), Is this product a normal or inferior product? 4) Is the elasticity for Corn flakes cereal is greater of less than the elasticity of cereal in general? Why? (the answer is from determinants of demand elasticity) 5) Is the demand for tooth pick elastic or inelastic? Why? (the answer is from determinants of demand elasticity).
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2) Assume that the percentage increase in the
3) Assume that the percentage increase in income (%ΔI) is 4% and the percentage decrease in the quantity demanded (%Δq) is -6%, find income elasticity (EI), Is this product a normal or inferior product?
4) Is the elasticity for Corn flakes cereal is greater of less than the elasticity of cereal in general? Why? (the answer is from determinants of
5) Is the demand for tooth pick elastic or inelastic? Why? (the answer is from determinants of demand elasticity).
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