Demand for Magnum Ice Cream is given by an equation as Q = 70 – 10P + 4 Px + 50 I Where, Q = Quantity of Magnum demanded, P = Price of Magnum Ice Cream, Px = Price of Walls Ice Cream, I = Per Capita Income a. Assume P = Rs 100, Px = Rs 120 and I = Rs 25 (Rs in thousands). Calculate (i) Price Elasticity of Demand (ii) Cross Price Elasticity of Demand (iii) Income Elasticity of Demand
Demand for Magnum Ice Cream is given by an equation as Q = 70 – 10P + 4 Px + 50 I Where, Q = Quantity of Magnum demanded, P = Price of Magnum Ice Cream, Px = Price of Walls Ice Cream, I = Per Capita Income a. Assume P = Rs 100, Px = Rs 120 and I = Rs 25 (Rs in thousands). Calculate (i) Price Elasticity of Demand (ii) Cross Price Elasticity of Demand (iii) Income Elasticity of Demand
Chapter5: Elasticity Of Demand And Supply
Section: Chapter Questions
Problem 1.1P: (Calculating Price Elasticity of Demand) Suppose that 50 units of a good are demanded at a price of...
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Demand for Magnum Ice Cream is given by an equation as Q = 70 – 10P + 4 Px + 50 I
Where, Q = Quantity of Magnum demanded, P = Price of Magnum Ice Cream, Px = Price of Walls Ice Cream, I = Per Capita Income
a. Assume P = Rs 100, Px = Rs 120 and I = Rs 25 (Rs in thousands).
Calculate
(i) Price
(ii) Cross Price Elasticity of Demand
(iii) Income Elasticity of Demand
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