Suppose the own price elasticity of demand for good X is −4, its income elasticity is 3, its advertising elasticity is 4, and the cross-price elasticity of demand between it and good Y is 4. Determine how much the consumption of this good will change if:

ECON MICRO
5th Edition
ISBN:9781337000536
Author:William A. McEachern
Publisher:William A. McEachern
Chapter5: Elasticity Of Demand And Supply
Section: Chapter Questions
Problem 1.1P: (Calculating Price Elasticity of Demand) Suppose that 50 units of a good are demanded at a price of...
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Suppose the own price elasticity of demand for good X is −4, its income elasticity is 3, its advertising elasticity is 4, and the cross-price elasticity of demand between it and good Y is 4. Determine how much the consumption of this good will change if:

Instructions: Enter your responses as percentages. If you are entering a negative number, be sure to use a (−) sign.

a. The price of good X decreases by 4 percent.

 percent

b. The price of good Y increases by 9 percent.

 percent

c. Advertising decreases by 2 percent.

 percent

d. Income increases by 3 percent.

 percent

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