Question
The demand for good X is given by Qdx= 1,245-0.5Px+0.25Py-8Pz+0.1I. Good X sells for $6,000 (Px=$6,000). Research shows that the prices of the related goods
The demand for good X is given by Qdx= 1,245-0.5Px+0.25Py-8Pz+0.1I. Good X sells for $6,000 (Px=$6,000). Research shows that the prices of the related goods are given by Py=$5,900 and Pz=$90, while the average income of individuals consuming this product is I= $55,000.
a. Calculate the price elasticity of demand for good X at the current price of X.
b. Calculate the crocs-price elasticity of demand for good X, with respect to price of good Y.
c. Calculate the income elasticity of demand for good X
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Managerial Accounting
Authors: John J. Wild, Ken W. Shaw
2010 Edition
9789813155497, 73379581, 9813155493, 978-0073379586
