Name: A EC3333 Ag Prices - Homework 7 Chapter 3 Demand Elasticities and Related Coefficients ID: 1. You have been hired to do some consulting for Big Red Lawn Tractors. Specifically, they want you to advise them on how they should price their lawn tractors. You have been given the following data to make your analysis: Year Average Income of Price of Main Units Sold Price Per Unit Buyer Competitor 1999 12,000 $7,500 $60,000 $6,100 2000 14,000 $7.100 $70,000 $7,000 Answer the following questions. For each, use the arc-elasticity formula. (a) Compute the income elasticity of demand for this lawn tractor and explain your results. Is this lawn tractor a normal or an inferior good? (b) Compute the cross-price elasticity of demand for this lawn tractor with respect to its main competitor and explain your results