What is the income elasticity

Reference no: EM13688845

Demand for a good is given by Qd=500-30P1+20P2+5Y and P1=2, P2=2 and Y=100. Calculate the quantity demanded. Is this a normal good? is good 2 a substitute or complement? Now P1 changes to 3, P2 and Y unchanged. Calculate the elasticity of demand. Now P1 is unchanged at 2, and Y remains at 100, but P2 changes to P2=3. What is the cross elasticity of demand? Finally, P1=2, P2=2 but Y rises from 100 to 200. What is the income elasticity?

Reference no: EM13688845

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