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Demand for X is given as Qx = 10Px -.7 Pz1.5, where Qx is quantity demanded of X, Px is the price of X, Pz is the price of a related good, and Y is...

This question was answered on Jan 29, 2013. View the Answer
6. Demand for X is given as Qx = 10Px -.7 Pz1.2Y1.5, where Qx is quantity demanded of X, Px is the price of X, Pz is the price of a related good, and Y is income.

a- Find the price elasticity of demand for X? ..............................

b- Find the income elasticity of demand for X? .........................

c- Find the cross price elasticity of demand for X? .......................

d- If the price of X increases from the current level, what will happen to demand for X? demand doesn't changes, only the quantity demanded

e- If the price of X increases from the current level, what will happen to quantity demanded for X? decrease (-)

f- If the price of X increases from the current level, what will happen to the revenue of the business?

g- If the price of X increases from the current level, what will happen to the profit of the business?

h- What is the relationship between X and Z? .........................................

i- If the price of Z increase, what will happen to demand for X? decrease (-)

j- If the price of Z increase, what will happen to quantity demanded for X? decrease (-)

k- If income increase, what will happen to demand for X? ..........................

l- If income increase, What will happen to quantity demanded for X? .......................
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Find the price elasticity of demand for X? = .-0.7
b- Find the income elasticity of demand for X? +1.5.
c- Find the cross price elasticity of demand for X?..+1.2
d- If the price of X increases from...

This question was asked on Jan 28, 2013 and answered on Jan 29, 2013.

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