The demand function of a good is givenby Q = 500 – 4P + 0.02Y. Price and-income are known to be P = 20 and Y =%3D14 000, respectively. Find the incomeelasticity of demand.

The price elasticity is the ratio of the percentage change in quantity demanded because of the…

Answered: The demand function of a good is given…

The demand function of a good is given by Q = 500 – 4P + 0.02Y. Price and income are known to be P = 20 and Y = 14 000, respectively. Find the income elasticity of demand.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter3: Demand Analysis

Section: Chapter Questions

Problem 6E

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Question

The demand function of a good is given
by Q = 500 – 4P + 0.02Y. Price and
-
income are known to be P = 20 and Y =
%3D
14 000, respectively. Find the income
elasticity of demand.

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