The coconut oil demand function (Bushena and Perloff, 1991) is Q=1,200-9.5p+16.2pp +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 50 cents per pound, pp is 29 cents per pound, and Q is 1,325 thousand metric tons per year. Calculate the price elasticity of demand for coconut oil and the cross-price elasticity of demand (with respect to the price of palm oil). The price elasticity of demand is = e= (Enter your response rounded to three decimal places and include a minus sign.)
The coconut oil demand function (Bushena and Perloff, 1991) is Q=1,200-9.5p+16.2pp +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 50 cents per pound, pp is 29 cents per pound, and Q is 1,325 thousand metric tons per year. Calculate the price elasticity of demand for coconut oil and the cross-price elasticity of demand (with respect to the price of palm oil). The price elasticity of demand is = e= (Enter your response rounded to three decimal places and include a minus sign.)
Chapter5: Elasticity Of Demand And Supply
Section: Chapter Questions
Problem 1.1P: (Calculating Price Elasticity of Demand) Suppose that 50 units of a good are demanded at a price of...
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![The coconut oil demand function (Bushena and Perloff, 1991) is
Q=1,200-9.5p+16.2pp +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 50 cents per pound, pp is 29 cents per pound, and Q is 1,325 thousand metric tons per year. Calculate the price
elasticity of demand for coconut oil and the cross-price elasticity of demand (with respect to the price of palm oil).
The price elasticity of demand is
e=
(Enter your response rounded to three decimal places and include a minus sign.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0ba9a53b-55f9-4172-a80d-cee6ac31f4d2%2Ffa88b141-f339-4602-9dc1-4c29b17c883f%2F9zuitf8_processed.jpeg&w=3840&q=75)
Transcribed Image Text:The coconut oil demand function (Bushena and Perloff, 1991) is
Q=1,200-9.5p+16.2pp +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 50 cents per pound, pp is 29 cents per pound, and Q is 1,325 thousand metric tons per year. Calculate the price
elasticity of demand for coconut oil and the cross-price elasticity of demand (with respect to the price of palm oil).
The price elasticity of demand is
e=
(Enter your response rounded to three decimal places and include a minus sign.)
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