1. Suppose the own price elasticity of demand for good X is 4, its income elasticity is...
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1. Suppose the own price elasticity of demand for good X is 4, its income elasticity is 3, its advertising elasticity is 4, and the cross-price elasticity of demand between it and good Y is 4. Determine how much the consumption of this good will change if:
Enter your responses as percentages. If you are entering a negative number, put () sign.
a. The price of good X decreases by 4 percent.
b. The price of good Y increases by 9 percent.
c. Advertising decreases by 2 percent. d. Income increases by 3 percent.
2. Suppose demand is given by Qxd = 50 4Px + 6Py + Ax, where Px = $10, Py = $2, and Ax = $50. What is the own price elasticity of demand for good x?
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