# Answer to Question #74466 in Microeconomics for Mesfin Tesfaye

Question #74466

Suppose demand for good A is given by DA = 500 - 10 Pa + 2 Pb + 0.70I where Pa is the

price of good A, Pb is the price of some other good B, and I is income. Assume that Pa is

currently $10, Pb is currently $5, and I is currently $100.

a. What is the elasticity of demand for good A with respect to the price of good A at the

current situation? Interpret the nature of elasticity of demand.

price of good A, Pb is the price of some other good B, and I is income. Assume that Pa is

currently $10, Pb is currently $5, and I is currently $100.

a. What is the elasticity of demand for good A with respect to the price of good A at the

current situation? Interpret the nature of elasticity of demand.

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