Cross elasticity of demand using arc elasticity formula

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In the bedding market, when the family income is $12,000.00, 3,800 units are demanded. With an income of $14,400.00, the demand for this good becomes 4,200 units.

a. Calculate the income elasticity of demand using the arc elasticity formula. Develop the complete procedure to calculate it

b. Interpret the result of elasticity Sheet holders are priced at $18.00 each. At that price, the demand for elastics for a fitted sheet is 1,200 units. When the price of bras falls to $14.00 each, the demand for elastics is 1,600 units.

c. Calculate the cross elasticity of demand using the arc elasticity formula. Develop the complete procedure to calculate it.

d. Indicate what type of relationship both products have based on the result of the previous section.

Reference no: EM133235629

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