The Table Below Gives Data for a Particular Market A) What Is the Price Elasticity of Demand for the

question 175

Short Answer

The table below gives data for a particular market. $$\begin{array} { c c c c c c } \hline \text { Year } & \begin{array} { c } \text { Average } \\\text { Income }\end{array} & \text { Price of A } & \text { Qu. of A } & \text { Price of B } & \text { Qu. Of B } \\\hline 1 & \$ 40000 & \$ 2 & 800 & \$ 10 & 16 \\2 & 40000 & 3 & 600 & 10 & 18 \\3 & 40000 & 3 & 400 & 8 & 20 \\4 & 48000 & 3 & 600 & 8 & 22 \\\hline\end{array}$$ a) What is the price elasticity of demand for the product A?
b) What is the price elasticity of demand for the product B?
c) What is the income elasticity of demand for the product A?
d) What is the income elasticity of demand for the product B?
e) What is the cross-elasticity of demand of product A for a change in the price of product B?

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Definitions:

Linear Effects

Phenomena or changes that are directly proportional to the changes in an independent variable, showing a straight-line relationship in graphical representations.

Worst Predictor

A variable or factor that provides little to no useful information in forecasting or predicting outcomes.

Linear Effects

The impact on a dependent variable that is proportional to the change in an independent variable, suggesting a straight-line relationship in a statistical model.

Months Of Service

The total number of months an individual has worked or served in a particular job or capacity.