**Point** **Cross** Price **Elasticity** **of** **demand** =(dQ/dPx)*(Px/Q)
dQ/dPx=100
We have calculated in part (a), Q=54500 at Px=$95
Put these values in the formula as under
**Point** **Cross** Price **Elasticity** **of** **demand** =(dQ/dPx)*(Px/Q)=100*95/54500=0.174312
**Cross** Price

124827 **Point** Income **Elasticity**/**Point** **Cross** **Elasticity** **Point** Income **Elasticity**/**Point** **Cross** **Elasticity** Answer (a):
Qs=5,000-1000Ps + 0.1I + 100 Pa
Ps = 1
I= 20,000
Pa = 0.80
Putting these values in the **demand** curve above we get:
Qs = 5000 - 1000x1

30908 **Cross** Price **Elasticity** **of** **Demand** **Cross** Price **Elasticity** **of** **Demand** **Point** price **elasticity** **of** **demand** between good X and the substitute Good =(dQx/dPz)*Pz/Qx
Calculate dQx/dPz = +0.65 (All other terms being constant with respect to Pz expect for the

Own price **elasticity**:-1.6
Since absolute value **of** price **elasticity** **of** **demand** is more than 1, we can say that **demand** is elastic at this **point**.

**Point** Price, Income & **Cross** **Elasticity**
**Point** Price **Elasticity**: **Point** **elasticity** is measure **of** the proportionate changes in quantity demanded in response to small changes in price (Forgang & Einolf, 2007).

Absolute value **of** own price **elasticity** **of** **demand** is greater than one, we can say that **demand** is elastic at this **point**.

**elasticity** **of** **demand** is between 0 and 1, we can say that **demand** is inelastic at given **point**.

the **point** **cross**- price **elasticity** **of** **demand** is

Elc = (dQ/dPc)*(Pc/Q) = 8*(10/94) = -0.851

(d) Calculate the arc **cross** price **elasticity** **of** **demand** between Alaskan King Crab and lobsters if the price **of** lobsters is $14.00 and the price

Smith has the following **demand** equation for a certain product: Q = 30 - 2P
a. At a price **of** $7, what is the **point** **elasticity**?
**Point** **elasticity** = dQ/dP *P/Q=
dQ/dP = -2
Q at price **of** $7 = 30-2*7 = 16
**Point** **elasticity** = -2*7/16 = -875
b.

The **cross**-price **elasticity** **of** **demand** between Sailright and its closest competitor is +2.25 and income **elasticity** **of** **demand** is +1.5.