Price, income and cross elasticity

Problem 1

Calculate the arc price elasticity for the following data that reflect a drop in the price of the product and define its behavior.Use the economists' method.

P	Q
5	20
3	80

Problem 2

From the following demand equation for a product, calculate the point price elasticity for a and b and determine what type of behavior the product exhibits

Qd= -5P + 200

Pa=35

Pb=20

Problem 3

Calculate the arc cross elasticity in the following situation and determine whether products a and b are substitutes or complements.Use the method of mathematicians.

Pa	Qb
$30	25
$43	35

Problem 4

From the following demand equation, calculate the point cross elasticity and determine if products a and b are substitutes or complements.

Qb = 800 - 10 Pa

Pa=50

Qb= 300 + 25 Pa

Pa=7

Problem 5

Calculate the point income elasticity for the following income levels and determine the behavior of the product.

1. Q = -15xI + 500

I= 20

1. Q = 12xI - 100

I= 30

Problem 6

Calculate the arc income elasticity for the change in income observed in the following situation and define its behavior.

I	Q
$100	40
$130	50

Problem 7

Use the following equationQd= -4P + 700

1. Calculate the point price elasticity for the following data and calculate the total income for each of the points.
2. Explain what happens to price elasticity and total income when price increases from 50 to 75
3. Explain what happens to price elasticity and total income when price increases from 100 to 125

Month	P	Q	Ep	IT
January	125
February	100
March	75
April	50

Problem 8

The Teenagers company makes and sells skateboards for an average price of $ 80. Last year they sold 2,500 and this year they hope to sell 2,000 skateboards. If this year the company increased its price to $ 100 and a company that sells substitute products sees its sales increase from 1,000 to 1,500 units? Calculate the price elasticity of the Teenagers company and the cross elasticity between the products.