The following demand for potatoes in the United States was estimated for 1959-1973 period: Q...
The following demand for potatoes in the United States was estimated for 1959-1973 period:
Q = 163.6 – 17.7Px + 9.3I
Where Q is the annual consumption of potatoes in pounds per
capita, or per person; Px is the average price in dollars per 100
pounds of potatoes; and I is the average per capita income
in thousands of 1958 dollars. If we imagine that this year,
Px = $3 and I = $2.344, calulate:
(a) The sales of potatoes this year.
(b) The elasticity of sales with respect to Px and
I.
(c) What would the sales be next year if Px was reduced
by 15% and I was increased by 20%?
(d) How much would income have to decrease if sales of potatoes
were to be 10% lower next year and price remained constant?
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The following demand for potatoes in the United States was
estimated for 1959-1973 period:
Q...
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