Question
Can you please help me figure out how to equate the following question? I am having such a hard time understand how to figure out
Can you please help me figure out how to equate the following question? I am having such a hard time understand how to figure out price elastacity.
Consider the market for the Ford F-150 pickup truck.The demand for the F-150 is given by Qd = 25000 - 0.9P + 0.75PS + 1.2I, where Qd is the quantity ofF-150s demanded (in 000s), P is the price of an F-150 in dollars, PS is the price of a Chevrolet Silverado truck, in dollars, and I is average consumer disposable income.The supply of F-150s is given by Qs = -12000 + 1.4P - 1.6Pt, where Qs is the quantity of F-150s supplied (in 000s) and Pt is the price of a set of tires for each pickup truck.
Suppose, initially:PS = $32,000, I = $16,000, and Pt = $800.
a. Price Elasticity ofDemand for F-150s:
b. Price Elasticity of Supply of F-150s:
c. Cross Price Elasticity of Demand forF-150s relative to Chevy Silverado:
d. Income Elasticity of Demand forF-150s:
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