i find it difficult to believe you would have been set this question without being told the formula to use.
Do you know the formula?
If so, post as much of the solution as you can
1. Given the demand function:
where P = the price of the good, PA = the price of an alternative good and Y = income
If P=4, PA=8 and Y=60 find:
a. the price elasticity of demand
b. the cross-price elasticity of demand
c. the income elasticity of demand
If income increases by 5%, calculate the corresponding change in the quantity demanded.
Is the good inferior or superior?
thank you all for your help.
i havent been given a formula with this question all i no by google is that
Price elasticity of demand: = (dQ / dP)*(P/Q)
Price elasticity of income: = (dQ / dI)*(I/Q)
Cross-price elasticity of demand = (dQ / dP')*(P'/Q)
should i post this in the calculus section perhaps?