Given the following demand function for Beef Qb = 10 6Pb + 4Pc +2I Where: Qb
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Question:
Given the following demand function for Beef
Qb = 10 – 6Pb + 4Pc +2I
Where: Qb is quantity of beef, Pb is price of beef, Pc is price of chicken and I is income.
1. If Pc = 4 and I = 10. Calculate and interpret the price elasticity of demand for beef when Pb goes from 4 to 6.
2. If Pb = 4 and I = 10. Calculate and interpret the cross price elasticity of demand for beef when Pc goes from 4 to 6.
3. If Pb = 4 and Pc = 4. Calculate and interpret the income elasticity of demand for beef when I goes from 10 to 20.
Related Book For
Managerial economics applications strategy and tactics
ISBN: 978-1439079232
12th Edition
Authors: James r. mcguigan, R. Charles Moyer, frederick h. deb harris
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