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Goods H, I, and J are related goods, each operating in a perfectly competitive market. As the price of Good H increases from $4 to

Goods H, I, and J are related goods, each operating in a perfectly competitive market.

  1. As the price of Good H increases from $4 to $5, its quantity demanded falls from 100 units to 60 units. Calculate the price elasticity of demand for this range.
  2. The equilibrium price for Good J is $5, and the equilibrium quantity is 40 units. The cross-price elasticity of Good J with Good H is 2.
    1. Are Good J and Good H normal goods, inferior goods, complementary goods, or substitute goods?
    2. Calculate the new equilibrium quantity of Good J after a 50% price increase for Good H.

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