Question: Given the demand function Q = 200 2P P A + 0.1Y 2 where P = 10, P A = 15 and Y

Given the demand function Q = 200 − 2P − P_A + 0.1Y²where P = 10, P_A = 15 and Y = 100, find
(a) the price elasticity of demand;
(b) the cross-price elasticity of demand;
(c) the income elasticity of demand.
Estimate the percentage change in demand if P_A rises by 3%. Is the alternative good substitutable or complementary?

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a b c When P 10 P 20 and Y 100 we have Q1165 PQ10 20 4 233 Hence Ep aQ PA ... View full answer

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