Suppose a consumer's demand function is .

a. What's the general equation for the own-price elasticity of demand for this consumer?

b. What's the price elasticity of demand when p=25?
c. Suppose instead that the demand function is image. How does the equation for own-price elasticity change?
d. Continue with the demand equation in (c). Suppose p=25. What's the cross-price elasticity for x?e. Continuing with part (d), what's the cross-price elasticity when the price of y is equal to 50?

What will be an ideal response?


a. The general equation is .


b. Plugging p=50 into the above equation, we get an elasticity of .


c.


d. Plugging 25 in for the price of x, we get a cross-price elasticity of


e.

Economics

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