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ECO Problem - Price elasticity of demand

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Question;Given the following demand function:Q = 2.0 P-1.33 Y2.0 A0.66Where: Q = quantity demanded (thousands of units)P = price ($/unit)Y = disposable income per capita ($ thousand)A = advertising expenditures ($ thousand)Determine the following when P = $2/unit, Y = $8 (i.e., $8000), and A = $25 (i.e., $25,000);a. Price elasticity of demand?b. The percentage increase in demand if disposable income percentage increases by 3%.?c. The percentage increase in demand if advertising expenditures are increased by 5 percent.?

 

Paper#57741 | Written in 18-Jul-2015

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