Question: the demand function Q = 4 0 0 - 2 P - 3 PA + 0 . 0 2 Y where P = 2 0

the demand function Q =400-2P -3PA +0.02Y where P =20, Pa =30 and Y =4000,a) Find the price elasticity of demand (4 pts.)b) Is the demand elastic or inelastic? Why? (2 pts.)c) Find the cross-price elasticity of demand (4 pts.)d) Is it a substitute good or complement good? Why? (2 pts.)e) Find the income elasticity of demand (4 pts.)) Is the good inferior or superior? Why? (2 pts.)8) If income rises by 5%, calculate the corresponding percentage change in demand. (2 pts.)

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