In the regional market for housing, demand for single detached homes depends on the price of the house, P. consumer income, N. and the price of a related good, townhouses, Pr. The demand equation is Q -0.3N +0.08P, -0.02P, Initially, average consumer income is N= S60.000 and the average price of townhouses is $310,000. Making these substitutions, we get Q42.800 - 0.02P This is our current demand equation. Suppose N- 60,000 and P-255,000. If the price of townhouses decreases from $310.000 to S280,000, what is the cross-price elasticity of demand for housing? O Click the icon to view the derivation of the current demand equation. The cross price elasticity of demand for housing when N 60,000, P 255,000, and the price of townhouses decreases from $310,000 to $280,000 is Single detached homes and townhouses are substitutes. 0.66 This is inelastic. (Round to two decimal places as needed.)
In the regional market for housing, demand for single detached homes depends on the price of the house, P. consumer income, N. and the price of a related good, townhouses, Pr. The demand equation is Q -0.3N +0.08P, -0.02P, Initially, average consumer income is N= S60.000 and the average price of townhouses is $310,000. Making these substitutions, we get Q42.800 - 0.02P This is our current demand equation. Suppose N- 60,000 and P-255,000. If the price of townhouses decreases from $310.000 to S280,000, what is the cross-price elasticity of demand for housing? O Click the icon to view the derivation of the current demand equation. The cross price elasticity of demand for housing when N 60,000, P 255,000, and the price of townhouses decreases from $310,000 to $280,000 is Single detached homes and townhouses are substitutes. 0.66 This is inelastic. (Round to two decimal places as needed.)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:In the regional market for housing, demand for single detached homes depends on the price of the house, PH. consumer income, N. and the price of a related good, townhouses, Pr. The demand
equation is Qa =0.3N + 0.08P, -0.02PH Initially, average consumer income is N = $60,000 and the average price of townhouses is $310,000. Making these substitutions, we get
Qa 42,800 - 0.02PH. This is our current demand equation.
Suppose N= 60,000 and P= 255,000. If the price of townhouses decreases from $310,000 to $280,000, what is the cross-price elasticity of demand for housing?
O Cick the icon to view the derivation of the current demand equation.
The cross-price elasticity of demand for housing when N 60,000, P" 255,000, and the price of townhouses decreases from $310,000 to $280,000 is Ea "0.66. This is inelastic.
Single detached homes and townhouses are substitutes.
(Round to two decimal places as needed.)
Transcribed Image Text:In the regional market for housing, demand for single detached homes depends on the price of the house, P. consumer income. N. and the price of a related good, townihouses, Pr. The demand equation is Qaa "0.3N+ 008P, -0.02PM
Initally, average consumer income is N $60.000 and the average price of townhouses is $310,000. Making these subathusions, we get Qa "42,800 -0.02P This is our current demand equation.
Suppose N 60,000 and PH= 255,000. the prioe of townhouses decreases from $310.000 to $280,00, what is the cross-price elasticity of demand for housing
Cick the koon to view the derivation of the curent demand equation.
The cross erice elanichy of demand for housing when N00.000, P, 256,000, and the price of fownhouses decreases trom S310.000 to SZ0.000 is
This is
Single detached homes and townhouses are
(Round to two decimal places as needed)
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