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Suppose the income elasticity of demand for good X is 2, its own price elasticity of demand is -4, its advertising elasticity is 3, and the cross-price elasticity of demand between it and good Y is -6. Determine how much the consumption of this good will change if:
a. The price of good X increases by 2 percent
b. The price of good Y increases by 2 percent
c. Advertising decreases by 2 percent
d. Income falls by 2 percent
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The focus of this analysis involves analyzing key economic themes such as demand, production, cost, and market structure with quantitative techniques.
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