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    Calculating the income elasticity of demand

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    The demand function for gadgets is given by the following formula
    Q = 1,000 -10Y - 2 P + 4A

    where Q is quantity, Y is income, P is price, and A is advertising.
    Currently, Y = 20, P = 30, and A is 15

    What is the income elasticity of demand?

    © BrainMass Inc. brainmass.com October 10, 2019, 3:03 am ad1c9bdddf

    Solution Preview

    Q = 1,000 -10Y - 2 P + 4A
    Put P=30 and ...

    Solution Summary

    Solution calculates the income elasticity of demand.