The coconut oil demand function (Buschena and Perloff, 1991) is

Q=1,2009.5p+16.2pp+0.2Y,

where Q is the quantity of coconut oil demanded in thousands of metric tons per year, p is the price of coconut oil in cents per pound,

pp

is the price of palm oil in cents per pound, and Y is the income of consumers. Assume that p is initially

50

per pound,

pp

is

30

per pound, and Q is

1,383

thousand metric tons per year.

Part 2

Calculate the income elasticity of demand for coconut oil.

Part 3

The income elasticity of demand for coconut oil is

enter your response here.

(Enter a numeric response using a real number rounded to three decimal places.)