1) Given the following demand function Q=8.5-p+0.1y a) Derive a formular for the price elasticity of demand...

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1) Given the following demand function Q=8.5-p+0.1y

a) Derive a formular for the price elasticity of demand and income elasticity of demand.

b) find the elasticity if p=6 and y=1000

c) what will happen to price elasticity of demand if income varies.

d) what will happen to income elasticity of demand if income varies.

e) derive the total revenue function. show that the relationship between price and revenue depends on elasticity (Assume y = 0).

Related Book For answer-question

Managerial Economics Markets and the Firm

ISBN: 978-0618988624

2nd edition

Authors: William Boyes

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Posted Date: Mar 01, 2024 09:42 PM

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1) Given the following demand function Q=8.5-p+0.1y a) Derive a formular for the price elasticity of demand...

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To calculate the price elasticity of demand and income elasticity of demand we need to derive the fo... View the full answer

Managerial Economics Markets and the Firm

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