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EQ 7 2010 Answer

EQ 7 2010 Answer - the quantity demanded of Pepsi products...

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EQ #7 – AGEC 105 – February 24, 2010 (2pts) 1. (a) According to this diagram, calculate the income elasticity of demand for pizza between points A and B. = 0.4 (1pt) (b) What kind of good is pizza? Necessity (1 pt) 2. Assume that you are an economic analyst for Pepsi. You suspect that if Coca-Cola raises the price for its products by 5%,
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Unformatted text preview: the quantity demanded of Pepsi products will rise by 2%, all other factors invariant. What is the cross-price elasticity between Pepsi and Coca-Cola products? = 0.4 $35,000 $25,000 I Q Pizza 14 16 A B...
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