Question: What formula shall we use to calculate elasticity here? Exercise 3 Suppose demand for good A is given by: Q,1 = 500 10 PA +

What formula shall we use to calculate elasticity here?

Exercise 3 Suppose demand for good A is given by: Q,1 = 500 10 PA + 2P3 + 0.7! where PA is the price of good A, P3 is the price of some other good B, and I is income. Assume that PA is currently $10, P3 is currently $5, and I is currently $100. a) What is the elasticity of demand for good A with respect to the price of good A at the current situation? b) What is the cross-price elasticity of the demand for good A with respect to the price of good B at the current situation? c) What is the income elasticity of demand for good A at the current situation

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