Suppose the demand function for the Toyota Camry is given by Qd = 500 -12PC + 10PH
Question:
a. What is the demand curve for the Toyota Camry if the price of the Accord is $25,000, gas is $2 per gallon and income is $50,000?
b. What is the equilibrium price and quantity in the market for Toyota Camrys?
c. Is demand elastic or inelastic at the equilibrium price?
d. What is the cross price elasticity of demand at equilibrium?
e. What is the income elasticity of demand for Camrys at equilibrium?
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Step by Step Answer:
A We have estimated demand function given by Qd 500 12PC 10PH 5PG 00001M We have PG2 PH25 since the variable is defined in thousands and M50000 Hence ...View the full answer
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