Question
The demand curve for a product is given by Q d x = 1,200 - 3P x - 0.1P z Where P z = SR300.
The demand curve for a product is given by Qdx = 1,200 - 3Px - 0.1Pz
Where Pz = SR300.
a.What is the own price elasticity of demand when Px = SR140? Is demand elastic or inelastic at this price? What would happen to the firm's revenue if it decided to charge a price below SR140?
b.What is the own price elasticity of demand when Px = SR240? Is demand elastic or inelastic at this price? What would happen to the firm's revenue if it decided to charge a price above SR240?
c.What is the cross price elasticity of demand between good X and good Z whenPx =SR140? Are good X and good Z substitutes or complements?
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Principles Of Microeconomics
Authors: Robert Frank
7th Edition
1260111083, 9781260111088
