- Suppose The Demand Function Of Product A Is Given As Q 220 4p 2pb Where Qa Quantity Demand For Product A Pa Uni 1 (262.25 KiB) Viewed 24 times
Suppose the demand function of product A is given as Q₁ = 220 - 4P₁+2PB+, where QA quantity demand for product A PA= Unit price of product A = Unit price of product B Y-Income of the consumer (a) Calculate the price elasticity of product A with respect to its own price. Evaluate the price elasticity of product A with respect to its own price when PA = 5, PB = 6, Y = 1900. [hint: Price elasticity of demand aQA OPA x (Give your answer to 2 decimal places.) (3 marks) QA T 50 (b) Calculate the value of income elasticity of demand for product A when P₁ = 0, PB = 10, Y = 2000. [Hint: Income elasticity of demand ƏQA x (Give your answer to 2 decimal places.) (3 marks) ƏY QA - (c) Calculate the total percentage change in demand for A when income of the consumer decreases by 10% (Give your answer to 2 decimal places.) (3 marks)