Examlex
Use the following definitions for an individual who consumes only two goods,x and y:
sx = share of income spent on x.
sy = 1-sx. = price elasticity of demand for x.
= price elasticity of demand for y.
ex,I = income elasticity of demand for x.
ey,I = income elasticity of demand for y. = cross price elasticity of demand for x.
= cross price elasticity of demand for y.
-The elasticity of the compensated demand curve
Can be computed as:
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