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NOTE:: *On a- I need to know HOW you get -10 within the equation! - If...

NOTE:: *On a- I need to know HOW you get -10 within the equation! - If you are not going to explain this please do not answer this question. The equation for a demand curve has been estimated to be Q=100 - 10P + 0.5Y Where Q is quantity, P is price, and Y is income. Assume P=7 and Y=50. A) At a price of 7, what is price elasticity? B) At an income level of 50, what is income elasticity? C) Now assume income is 70. What is the price elasticity at P=8? Reminder: (*On a- I need to know HOW you get -10 within the equation!)

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Answer #1

In answer of A, we get -10 by using partial derivative. This means change in quantity demanded due to the change in price level in case of price elasticity of demand.

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