The demand function for bicycles in China has been estimated to be Q= 2,000 + 15Y - 5.5P Where Y is income in hundred of $, Q is the old quantity demanded in units, and P is the old price ($) per unit. When P = $150 and Y = $15,000, determine the following: Wuestion: Price elasticity of demand (ɳp) and interpret your finding, Income elasticity of demand (ɳY) and interpret your finding.
The demand function for bicycles in China has been estimated to be Q= 2,000 + 15Y - 5.5P Where Y is income in hundred of $, Q is the old quantity demanded in units, and P is the old price ($) per unit. When P = $150 and Y = $15,000, determine the following: Wuestion: Price elasticity of demand (ɳp) and interpret your finding, Income elasticity of demand (ɳY) and interpret your finding.
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter3: Demand Analysis
Section: Chapter Questions
Problem 6E
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The demand function for bicycles in China has been estimated to be
Q= 2,000 + 15Y - 5.5P
Where Y is income in hundred of $, Q is the old quantity demanded in units, and P is the old price ($) per unit. When P = $150 and Y = $15,000, determine the following:
Wuestion: Price
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