Suppose a consumers demand function is dependent on both prices and income and takes the form: Qd=500-40P+(1/10)*I

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Suppose a consumers demand function is dependent on both prices and income and takes the

form: Qd=500-40P+(1/10)*I (I= income here.) We also know the supply function: Qs=50P+100.

What is income elasticity when Income = 1000?

Related Book For answer-question

Intermediate Microeconomics

ISBN: 978-0393123968

9th edition

Authors: Hal R. Varian

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Posted Date: Feb 15, 2024 02:29 AM

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Suppose a consumers demand function is dependent on both prices and income and takes the form: Qd=500-40P+(1/10)*I

Question:

Expert Answer:

Income elasticity measures the responsiveness of quantity demanded to changes in income It is calcul... View the full answer

Intermediate Microeconomics

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