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You are a consultant and have been employed by Urban General, a large inner - city hospital, to estimate the demand for its services. Your
You are a consultant and have been employed by Urban General, a large innercity hospital, to estimate the demand for its services. Your research indicates that the income elasticity of demand for the target market is ; the price elasticity of demand is ; and the crossprice elasticity of demand with respect to the price of services at St Elsewhere, a nearby hospital, is Area income increases by percent.
Quantity demanded at Urban General does not change.
Quantity demanded at Urban General falls by percent.
Quantity demanded at Urban General rises by percent.
Quantity demanded at St Elsewhere rises by percent.
There is not enough information to tell what happens to quantity demanded at either hospital.
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