Compute and interpret the cross elasticity of demand for tilapia with respect to the price of chicken?How is chicken related to tilapia? How responsive is the demand for tilapia to a change in income? Based on income elasticity of demand, what type of good is tilapia? Compute and interpret the own price elasticity of demand for tilapia. Assume the following demand function for tilapia and the mean values of the variables: Qa = 2.5- 6 Pt+2 P₂ +2 Pc + 0.05 Y + εMean Values:Qa= 20 kgPt =PhP140/kg PmPhP 200/kgPc=PhP 190/kgY =PhP 25,000=where: Qa= weekly household consumption of tilapia (kg), P₁= retail price of tilapia(PhP/kg),Pm = retail price of milkfish (PhP/kg). P. = retail price of chicken (PhP/kg), Y = weekly householdincome (Php), and & = error term

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ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Compute and interpret the cross elasticity of demand for tilapia with respect to the price of chicken?
How is chicken related to tilapia?
How responsive is the demand for tilapia to a change in income?
Based on income elasticity of demand, what type of good is tilapia?
Compute and interpret the own price elasticity of demand for tilapia.

Assume the following demand function for tilapia and the mean values of the variables: Qa = 2.5
- 6 Pt+2 P₂ +2 Pc + 0.05 Y + ε
Mean Values:
Qa= 20 kg
Pt =
PhP
140/kg Pm
PhP 200/kgPc=
PhP 190/kgY =
PhP 25,000
=
where: Qa= weekly household consumption of tilapia (kg), P₁= retail price of tilapia(PhP/kg),
Pm = retail price of milkfish (PhP/kg). P. = retail price of chicken (PhP/kg), Y = weekly household
income (Php), and & = error term

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