Suppose the own price elasticity of demand for good X is -5, its income elasticity is -3, its advertising elasticity is 3, and the cross-price...
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Question

Suppose the own price elasticity of demand for good X is -5, its income elasticity is -3, its

advertising elasticity is 3, and the cross-price elasticity of demand between it and good Y is 5. Determine how much the consumption of this good will change if:



a. The price of good X decreases by 6 percent.


 _____ percent


b. The price of good Y increases by 7 percent.


 ______ percent


c. Advertising decreases by 4 percent.


 ______ percent


d. Income increases by 2 percent.


 ______ percent

Top Answer

a. The price of good X decreases by 6 percent. _30____ percent (increase) b. The... View the full answer

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