Suppose the annual demand function for the Honda Accord is Qd = 430 -10 PA + 10

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Suppose the annual demand function for the Honda Accord is Qd = 430 -10 PA + 10 PC-10 PG, where PA and PC are the prices of the Accord and the Toyota Camry respectively (in thousands), and PG is the price of gasoline (per gallon). What is the elasticity of demand for the Accord with respect to the price of a Camry when both cars sell for $20,000 and fuel costs $3 per gallon? What is the elasticity with respect to the price of gasoline?
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Microeconomics

ISBN: 978-1118572276

5th edition

Authors: David Besanko, Ronald Braeutigam

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