Answer to Question #38991 in Economics of Enterprise for marvi

Question #38991
the demand equation is estimated to be 50 - 3p + 2po where po is the price of other good. assume the average value of P is $3 and the average value of po is $6. a. what is the price elasticity at the average values of P and Po? how should the price of the good can changed to increase total revenues? b. what is the cross elasticity at the average values of P and Po? what is the relationship between the two goods? c. if equation is correctly estimated is good inferior a necessity or a luxury? Explain.
1
Expert's answer
2014-05-26T12:50:29-0400
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