The coconut oil demand function (Buschena and Perloff, 1991) is Q=1,200-9.5p+16.2pp +0.002Y, where Q is the quantity of coconut oil demanded in thousands of metric tons per year, p is the price of coconut oil in cents per pound, pp is the price of palm oil in cents per pound, and Y is the income of consumers. Assume that p is initially 45 per pound, Pp is 31¢ per pound, and Q is 1,343 thousand metric tons per year. Calculate the income elasticity of demand for coconut oil. The income elasticity of demand for coconut oil is (Enter a numeric response using a real number rounded to three decimal places.)

The coconut oil demand function (Buschena and Perloff, 1991) is Q=1,200-9.5p+16.2pp +0.002Y, where Q is the quantity of coconut oil demanded in thousands of metric tons per year, p is the price of coconut oil in cents per pound, pp is the price of palm oil in cents per pound, and Y is the income of consumers. Assume that p is initially 45 per pound, Pp is 31¢ per pound, and Q is 1,343 thousand metric tons per year. Calculate the income elasticity of demand for coconut oil. The income elasticity of demand for coconut oil is (Enter a numeric response using a real number rounded to three decimal places.)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The coconut oil demand function (Buschena and Perloff, 1991) is Q = 1,200 - 9.5p + 16.2 pp + 0.2Y, where Q is the quantity of coconut oil demanded in thousands of metric tons per year, p is the price of coconut oil in cents per pound, Pp is the price of palm oil in cents per pound, and Y is the income of consumers. Assume that p is initially 45 ¢ per pound, Pp is 31 ¢ per pound, and Q is 1,275 thousand metric tons per year. Calculate the income elasticity of demand for coconut oil. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
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