Question
Suppose the demand function is given by = (8Px^ 0.5) (Py^0.25) (M^0.12) (Ax), where is the price of X, is the price of good Y,
Suppose the demand function is given by = (8Px^ 0.5) (Py^0.25) (M^0.12) (Ax), where is the price of X, is the price of good Y, M is income, and is the amount of advertising on X.
a) What is the own price elasticity of demand?
b) what is income elasticity of demand?
c) what is cross price elasticity of demand between X and Y?
d) Is good X a normal or inferior good? Why?
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Accounting Business Reporting For Decision Making
Authors: Jacqueline Birt, Keryn Chalmers, Albie Brooks, Suzanne Byrne, Judy Oliver
4th Edition
978-0730302414, 0730302415
