Question
The demand function for bicycles in Holland has been estimated to be Q=2,000+15Y-5.5P where Y is income, Q is the quantity demanded in units, and
The demand function for bicycles in Holland has been estimated to be Q=2,000+15Y-5.5P where Y is income, Q is the quantity demanded in units, and P is the price per unit. When P=150 euros and Y=15000 euros, determine the following:
a. Price elasticity of demand
b. Income elasticity of demand.
Please explain.
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Introduction to Econometrics
Authors: James H. Stock, Mark W. Watson
3rd edition
133595420, 978-0138009007, 138009007, 978-0133486872, 133486877, 978-0133595420
