Question
Suppose the demand for inkjet printers is estimated to be Q = 1000 - 5 p + 10 p X - 2 p Z +
Suppose the demand for inkjet printers is estimated to be Q = 1000 - 5p + 10pX - 2pZ + 0.1Y. If p = 80, pX= 50, pZ= 150, and Y = 20,000, answer the following sub-questions:
What is the price elasticity of demand?
What is the cross-price elasticity with respect to commodity X? Give an example of what commodity X might be.
What is the cross-price elasticity with respect to commodity Z? Give an example of what commodity Z might be.
What is the income elasticity?
(If you could show your work that would be great!)
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Solution We have the demand function Q 1000 5P 10PX 2PZ 01Y By subst...
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Basic Finance An Introduction to Financial Institutions Investments and Management
Authors: Herbert B. Mayo
10th edition
1111820635, 978-1111820633
