ZuoTi.Pro
Question

Given the demand function QA = 500 - 3PA - 2PB + 0.01I Where PA =...

Given the demand function QA = 500 - 3PA - 2PB + 0.01I

Where PA = 20, PB = 30 and I = 5000, calculate and interpret

a) The price of elasticity of demand.

b) The cross price elasticity of demand. What is the relationship between the two goods.

c) The income elasticity of demand.

business   economics   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

0 0
Add a comment
Know the answer?
Add Answer to:
Given the demand function QA = 500 - 3PA - 2PB + 0.01I Where PA =...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • 1. Given the demand function Q = 500 - 3P - 2P, +0.01Y where and P...

    1. Given the demand function Q = 500 - 3P - 2P, +0.01Y where and P denote quantity and price of the good, Y is income, and price of an alternative good. is the a) If P=20, PA = 30, and Y= 5000, find (i) the price elasticity of demand (ii) the cross-price elasticity of demand (iii) the income elasticity of demand b) If income rises by 5%, calculate the corresponding percentage change in demand, Is the good inferior or...

  • Given the following demand function for Beef Qb = 10 – 6Pb + 4Pc +2I Where:...

    Given the following demand function for Beef Qb = 10 – 6Pb + 4Pc +2I Where: Qb is quantity of beef, Pb is price of beef, Pc is price of chicken and I is income. 1. If Pc = 4 and I = 10. Calculate and interpret the price elasticity of demand for beef when Pb goes from 4 to 6. 2. If Pb = 4 and I = 10. Calculate and interpret the cross price elasticity of demand for...

  • The following demand function has been estimated for product A: QA= aPAbIcPBdPopeABfAAg where QA=quantity ofA demanded...

    The following demand function has been estimated for product A: QA= aPAbIcPBdPopeABfAAg where QA=quantity ofA demanded in units             PA=price ofA            PB= price of B            I= per capita income           Pop= total population          AA= advertising expenditures for A          AB= advertising expenditures for B How would you interpret the values for e, f, and g?

  • Consider the following demand equation for good a. Good a demands is a function of income...

    Consider the following demand equation for good a. Good a demands is a function of income (Y) and prices of good b and c. QDa(p,Y,pb,pc) = 12 − 3pa + 5Y −3pb +4pc. Pa = 2 Y=500 Pb = 3 Pc = 5 a. Calculate elasticity of demand. Does it respect law of demand? is it elastic or inelastic? Why? b. Calculate elasticity of income. Is it inferior or nomal good? Why? c. Calculate cross-price elasticities with good b. Is...

  • Suppose the demand function is given use derivative to derive the following: QX = 500 Px0.10...

    Suppose the demand function is given use derivative to derive the following: QX = 500 Px0.10 Pz3.34 I-1.4 6.1 Derive the price elasticity of demand 6.2 The Cross Price elasticity 6.3 The Income elasticity 6.4 Interpret the results of each elasticity. 6. Suppose the demand function is given derivatives to derive the following: use 3.34 500 P10 P334114 Qx Z 6.1 Derive the price elasticity of demand 6.2 The Cross Price elasticity 6.3 The Income elasticity 6.4 Interpret the results...

  • 4. Suppose the annual demand function for the Honda Accord is QD - 430-01PA+01Pc-10Pa where PA...

    4. Suppose the annual demand function for the Honda Accord is QD - 430-01PA+01Pc-10Pa where PA and Pc are the prices of Accords and Camrys and Po is the price of gas. Assume this that year the price of an Accord and the price of a Camry are both $20,000 and the price of gas is $3 per gallon. You are to use the point formula for calculating the following elasticities. Given the prices of Accords, Camrys and gas, what...

  • Bonus (5 points) True or False: Consider a monopolist which produces two interrelated goods A and B with QA(PA, PB) and QB(PA, Pa) where Q is the demand and P is the price. If dA-0, the firm could ch...

    Bonus (5 points) True or False: Consider a monopolist which produces two interrelated goods A and B with QA(PA, PB) and QB(PA, Pa) where Q is the demand and P is the price. If dA-0, the firm could charge the same price as a monopolist in market A which produces only good A. Explain your answer. (Answers without correct explanation will receive 0 credit.) Bonus (5 points) True or False: Consider a monopolist which produces two interrelated goods A and...

  • Anna’s demand for peaches is given by PA = 200 – 3QA, where QA is the quantity (kilograms) demanded at price PA($/kilo)...

    Anna’s demand for peaches is given by PA = 200 – 3QA, where QA is the quantity (kilograms) demanded at price PA($/kilo). Basil’s demand is given by PB = 120 – 2QB, where QB is the quantity (kilograms) demanded at price PB ($/kilo). Each of the two has $2,000 that they can spend if they want to buy something. Suppose the endowments are as follows: Anna has 110 kilograms of peaches, Basil has none. When they trade, who will sell...

  • 70.7 1. Judy's Marshallian demand for oranges is 10.4, where pa is the price of apples,...

    70.7 1. Judy's Marshallian demand for oranges is 10.4, where pa is the price of apples, po is the price of oranges, and I is Judy's income. Suppose I = 100, Pa = 2, and p. = 1. (a) Find and interpret the income elasticity for the demand for oranges. Are oranges an inferior or normal good? (b) Find the own price elasticity of demand for oranges. Discuss how the price elas- ticity varies with po. (c) Find the cross...

  • A firm produces two different goods, with demand given by the following: Pa = 100 –...

    A firm produces two different goods, with demand given by the following: Pa = 100 – 3Qa + 2Qb and Pb = 105 – 8Qb Where Pa = price of good A, Pb = price of good B, Qa = quantity of good A and Qb = quantity of good B. The marginal costs for the two goods are 12 for good A and 15 for good B. Determine optimal prices and quantities for each good.

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT