suppose demand for good X is given by QX = –5PX + 10PY + 1.25I. Suppose...

Question

Question

suppose demand for good X is given by Q_X = –5P_X + 10P_Y + 1.25I.

Suppose P_Y=$1 and I=$12.
1. What is the equation for the own-price demand curve?
2. What is the slope of the own-price demand curve?
3. Calculate the price elasticity of demand if P_X = $2. Interpret your result

Answer 1

Answer #1

Answer 2

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