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).
Chapter5: Markets In Motion And Price Controls
Section: Chapter Questions
Problem 10P
Related questions
Question
![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
Py = price of a bus ticket
Q = quantity demanded
P, = price of gasoline
Y = consumer income
%3D
According to the above equation, airline tickets and bus tickets are
V 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).
Reaction
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Transcribed Image Text: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
Py = price of a bus ticket
Q = quantity demanded
P, = price of gasoline
Y = consumer income
%3D
According to the above equation, airline tickets and bus tickets are
V 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).
Reaction
O stv
MacBook Air
80
DII
DD
F1
F2
F3
F4
F5
F6
F7
F8
F9
F10
F11
!
@
#3
$
一
2
3
4.
6
7
Q
W
E
Y
U
{
A
F
G
J
K
L
Z
C
V
B-
M
く
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Fion
command
command
option
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