Given the market demand schedule of a commodity Qx = 100 – Px + 0.75Pm – 0.25Pz + 0.00750075Y. If Px=10, Pm =20, Pz =40 and Y = 10000 Where; Px = price of the commodity Pm= price of another commodity M Pz = price of another commodity Z Y = level of income Calculate: i) The different cross elasticities of demand and indicate the types of commodities ii) The income elasticity of demand for commodity X and indicate the type of commodity iii) The own-price elasticity of demand and comment on the stabilityresult.
Given the market demand schedule of a commodity Qx = 100 – Px + 0.75Pm – 0.25Pz + 0.00750075Y. If Px=10, Pm =20, Pz =40 and Y = 10000 Where; Px = price of the commodity Pm= price of another commodity M Pz = price of another commodity Z Y = level of income Calculate: i) The different cross elasticities of demand and indicate the types of commodities ii) The income elasticity of demand for commodity X and indicate the type of commodity iii) The own-price elasticity of demand and comment on the stabilityresult.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Given the market
Qx = 100 – Px + 0.75Pm – 0.25Pz + 0.00750075Y. If Px=10, Pm =20, Pz =40 and Y = 10000
Where; Px =
Pm= price of another commodity M
Pz = price of another commodity Z
Y = level of income
Calculate:
i) The different cross elasticities of demand and indicate the types of commodities ii) The income
iii) The own-
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