Consider the following demand function for airline tickets (quantities are in thousands): Q = 10-0.1p, + 0.4py + 0.25p, + 0.005Y, where P, = price of an airline ticket Q = quantity demanded P, = price of a bus ticket P2 = price of gasoline Y= consumer income According to the above equation, airline tickets and bus tickets are goods. If, in equilibrium, the cross-price elasticity between airline tickets and gasoline is 1.1; when the price of the gasoline increases by 4%, the quantity demanded of airline tickets increases by% (enter your response rounded to two decimal places).

Consider the following demand function for airline tickets (quantities are in thousands): Q = 10-0.1p, + 0.4py + 0.25p, + 0.005Y, where P, = price of an airline ticket Q = quantity demanded P, = price of a bus ticket P2 = price of gasoline Y= consumer income According to the above equation, airline tickets and bus tickets are goods. If, in equilibrium, the cross-price elasticity between airline tickets and gasoline is 1.1; when the price of the gasoline increases by 4%, the quantity demanded of airline tickets increases by% (enter your response rounded to two decimal places).

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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