Purchase Solution

Income Elasticity of Demand using Demand Function

Not what you're looking for?

Ask Custom Question

"Suppose the demand function is Q=20-4*Price+10*Income, what is the income elasticity if Income=400 and Q=20?"

Answer

A. There is not enough information to answer this question

B. 200

C.1000

Purchase this Solution
Solution Summary

The solution describes the steps to calculate income elasticity of demand. Income elasticity of demand using demand functions are examined.

Solution provided by:
Lokesh Jain, MSc
Education
  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
Recent Feedback
  • "Thank you"
  • "Really great step by step solution"
  • "I had tried another service before Brain Mass and they pale in comparison. This was perfect."
  • "Thanks Again! This is totally a great service!"
  • "Thank you so much for your help!"
Purchase this Solution
Free BrainMass Quizzes
Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

View More Free Quizzes
Related BrainMass Solutions

  • elasticity of demand

    100373 What is the elasticity of demand given the price and income combination?

  • Income Elasticity of Demand and Cross Elasticity of Demand

    319025 Income Elasticity of Demand and Cross Elasticity of Demand 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.

  • Economics Demand Function

    Based on the value of the income elasticity of demand you just estimated, is good Y normal, inferior or income independent? In this case income elasticity of demand is less than zero, it means that Y is a inferior good.

  • Cost Schedules & Elasticity

    QD = 1,200,000 - 40P What is the point price elasticity of demand at prices of: $8,000 $10,000 12. Given the following demand function: Q = 2.0 P1.33 Y2.0 A0.50 (What is the Advertising Elasticity of Demand?

  • Elasticities of demand and supply: Calculation Methods

    Given the following demand function, calculate the following: a. Price elasticity of demand b, Income elasticity of demand c. Advertising elasticity of demand Qx = -1000Px + 100Y + 0.08Pop -1,000,000i + 0.01A 2.

  • demand function for bicycles

    Price elasticity of demand b. Income elasticity of demand a.

  • coefficient on the income variable

    none of the above Answer a. Linear In case of linear function, the point price elasticity is dQ/dP*P/Q Thus, point price elasticity is a function of the explanatory variables. 3.

  • Interpreting Regression and Elasticity Coefficients

    Absolute value of own price elasticity of demand=0.79936 Absolute value of cross price elasticity of demand= 0.479616 Absolute value of Advertizing elasticity of demand= 0.459632 Absolute value of Income elasticity of demand= 0.039968 We find that

  • Managerial Economics

    Explain your answer using an S/D graph 3. Given the following equation: Q=20 - 2p + 35I - 13S, where Q is quantity, P is price, I is income, and S is the price of a related good, what is the own price elasticity of demand when Q=20 and P=5?

View More Related Solutions