nsider the demand function for good1, Q1 = 2037 - 9P1 + 0.6000000000000001P2 - 0.75P3 + 0.07Y Where, price of good1 (P1) is 59, price of good2 (P2) is 255, price of good3 (P3) is 195, and income (Y) is 24425; (a) Find the price elasticity of demand (PED). **Don't forget to consider taking absolute value!** (b) Find the income elasticity of demand (YED). (c) Find the cross-price elasticity of demand (XED) between good1 and good3. (d) Estimate the percentage change in the demand for good1 resulting from a 4%
5.
Consider the demand function for good1, Q1 = 2037 - 9P1 + 0.6000000000000001P2 - 0.75P3 + 0.07Y
Where, price of good1 (P1) is 59, price of good2 (P2) is 255, price of good3 (P3) is 195, and income (Y) is 24425;
(a) Find the
(b) Find the income elasticity of demand (YED).
(c) Find the cross-price elasticity of demand (XED) between good1 and good3.
(d) Estimate the percentage change in the demand for good1 resulting from a 4% decrease in the price of good2.
(e) Based on the value of YED, comment on the nature/type of the goods ( answer in one word )
(f) Based on the value of the XED between good 1 and good3, comment on the relationship between these two goods ( answer in one word)
Step by step
Solved in 2 steps
