Demand for books is given by formula ???? = 10???? − ???????? + ????, where P is book price and Pc stand for price of cookies. What is the income elasticity of demand at P=2, Pc=1, and Y=5? Is the demand elastic or inelastic in income, is it inferior or normal? What is the cross-price elasticity at P=2, Pc=1, and Y=150? Are books and cookies complements or substitutes? Explain.
Q= 10P-Pc+Y When P=2,Pc=1 and Y=5, Q= 10(2)-1 (1)+5=24 Units Income elasticity of demand is given by %change in quantity... View the full answer