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1) Given the following demand function Q=8.5-p+0.1y a) Derive a formular for the price elasticity of demand and income elasticity of demand. b) find the

1) Given the following demand function Q=8.5-p+0.1y

a) Derive a formular for the price elasticity of demand and income elasticity of demand.

b) find the elasticity if p=6 and y=1000

c) what will happen to price elasticity of demand if income varies.

d) what will happen to income elasticity of demand if income varies.

e) derive the total revenue function. show that the relationship between price and revenue depends on elasticity (Assume y = 0).

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