Question: Can you find me the correct solution for this problem please? 3. The demand function of a good is given by: Q = a-bP -

Can you find me the correct solution for this problem please?

3. The demand function of a good is given by: Q = a-bP - CPA + dY where P is the price of the good, PA is the price of an alternative good, Y is income. It is known that P = 100, PA = 60, Y = 1000 and Q is 10000. (a) Is the alternative good substitutable or complementary? Give a reason for your answer. (1 mark) (b) Find expressions, in terms of b, c and d for the: (i) price elasticity of demand of the good; (2 marks) (ii) cross-price elasticity of demand between the good and the alternative; (2 marks) (iii) income elasticity of demand. (2 marks) (c) The cross-price elasticity is -0.012. The income elasticity is four times the price elasticity. When income increases by 20%, the demand decreases by 4%. Determine the values of a, b, c and d

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