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Calculate the own-price elasticity of demand

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Reference no: EM132191813

Suppose that the Demand for a product X has been estimated to be: 

Qx = 400 + 0.002I + 8Z - 5Py - 20Px

Where Qx is the quantity demanded for the product X, Px is the price of product X, Py is the price of a related product Y, I is the level of income, and Zis some other variable that affects the demand for product X.

Current values of the variables are: I = 10,000; Z = 150; Py = 50; Px = 50

Calculate the quantity of sales of Qx at the current values of the other variables.

Qx = _____________________________

Calculate the (i) own-price elasticity of demand, (ii) income elasticity of demand, and (iii) cross-price elasticity of demand with product Y at the current values of the variables.

(i) Own-price elasticity

(ii) Income elasticity

(iii) Cross price elasticity

Reference no: EM132191813

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