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Elasticity: Suppose the demand for good x is

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Suppose the demand for good x is lnQxd = 21 - .8 lnPx - 1.6 lnPy + 6.2 lnM + .4 lnAx. Then we know that the own-price elasticity for good x is:

A. unitary.

B. elastic.

C. inelastic.

D. Indeterminable.

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Solution Summary

This post shows how to work out whether an item has elastic or inelastic demand.