Use the arc-approximation formula to calculate the price-elasticity of demand coefficient of a firm's product demand between the (quantity, price) points of (12, $20) and (18, $16). (b) Calculate the cross-price elasticity of demand coefficient of a firm's product X, given that a 10% increase in the price of its close substitute, product Y, causes the quantity demand of product X to increase by 6%. c) Calculate the income-elasticity of demand coefficient for a product for which a 5% increase in consumers' income will increase the quantity demanded by 4%.

Answer rating: 100% (QA)

a According to the midpoint formula the price elasticity o... View the full answer