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, P. The demand equation is Q = 0.1N+0.08P,-0.01PH Initially, average consumer income is N= $40,000 and the average price of townhouses is $285,000. Making these substitutions, we get Q=26,800 -0.01PH- This is our current demand equation. Suppose income changes from $40,000 to $50,000. What is the income elasticity of demand for housing when the price is $240,000? Click the icon to view the derivation of the current demand equation. ***

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, P. The demand equation is Q = 0.1N+0.08P,-0.01PH Initially, average consumer income is N= $40,000 and the average price of townhouses is $285,000. Making these substitutions, we get Q=26,800 -0.01PH- This is our current demand equation. Suppose income changes from $40,000 to $50,000. What is the income elasticity of demand for housing when the price is $240,000? Click the icon to view the derivation of the current demand equation. ***

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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