Quantitative Demand Analysis
1. (5 points) Suppose demand is given by Q xd = 50 _ 4Px + 6Py + Ax, where Px = $4, Py = $2, and Ax = $50. (a) What is the quantity demanded of good x? Please show your calculations. (b) What is the own price elasticity of demand (point elasticity) when PX = $4? Is demand elastic or inelastic at this price? […]