Explore BrainMass

Explore BrainMass

    Income Elasticity of Demand and Cross Elasticity of Demand

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Demand function for product: Qd = 500 - 2P + 3Pr + 0.1N, where P is price, Pr is price of related good, and N is per capita disposable income. Assume P = $10, Pr = $20, and N = $6,000.

    A. Income elasticity of demand at N = $6,000? (Show Work)

    B. Cross elasticity of demand given Pr = $20? (Show Work)

    © BrainMass Inc. brainmass.com October 2, 2020, 12:16 am ad1c9bdddf
    https://brainmass.com/economics/elasticity/income-elasticity-demand-cross-elasticity-demand-319025

    Solution Preview

    Demand function for product: Qd = 500 - 2P + 3Pr + 0.1N, where P is price, Pr is price of related good, and N is per capita disposable income. Assume P = $10, Pr = $20, and N = $6,000.

    A. ...

    Solution Summary

    The expert examines income elasticity of demand and cross elasticity of demand.

    $2.19

    ADVERTISEMENT