Calculate the relevant elasticities

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Reference no: EM131006011

When the price of good X is 100, the quantity demanded is 100. Calculate the relevant elasticities for the following changes:

When the price of X changes to 50, the quantity demanded rises to 250.

When the price of Y changes from 5 to 10, the quantity demanded of X increases to 120

When the person’s income changes from $10,000 to $20,000 the quantity demanded of X falls to 80

In your calculations use the midpoint rule since, effectively, you are calculating arc elasticities of demand. Also comment on whether the goods are substitutes/complements and normal/inferior for (ii) and (iii), respectively.

Please explain

Reference no: EM131006011

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