The coconut oil demand function

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The coconut oil demand function is Q=1,200-9.5PC+16.2Pp+0.2M where Q is the quantity of coconut oil demanded in thousands of metric tons per year, PC is the price of coconut oil in cents per pound, Pp is the price of palm oil in cents per pound, and M is the income of consumers. Assume that PC is initially 45 cents per pound, Pp is 31 cents per pound and Q is 1,275 thousand metric tons per year. a. Calculate the income elasticity of demand for coconut oil. (If you do not have all the numbers necessary to calculate numerical answers, write your answers in terms of variables.) b. Calculate the cross-price elasticity of demand for coconut oil. (If you do not have all the numbers necessary to calculate numerical answers, write your answers in terms of variables.)

Reference no: EM131236879

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