write my assignment 8561

At PX =80 , PY = 1300 AND I = 30 , the demand for good X is given by:QX =600 – 6*80 + 20*30 + 0.4*1300QX = 1240The point price elasticity of demand is given by:[Change in quantity of good X / change in price of good X] *[Price of good X/ quantity of good X].= [-6 * 80]/1240= 0.387According to the above result, demand is inelastic since it is less than 1.

c. Given your answer in part b, if PX would increases by 10%, by what percentage would sales decrease? What impact would this price increase have on total revenues from good X?

d. Given that PY = $1.300, ceteris paribus, calculate the cross price elasticity of demand for product X with respect to the price of product Y. 

e Given your answer in part d, how could we classify product X and product Y?

b) At PX =80 , PY = 1300 AND I = 30 , the demand for good X is given by:QX =600 – 6*80 + 20*30 + 0.4*1300QX = 1240The point price elasticity of demand is given by:[Change in quantity of good…