Managerial Economics: Practice Midterm #1 Solutions

You know that the current market price is $20 and average income is $20,000 a) Calculate current demand. At a price of $20, we have Q = 400 – 6($20) +.005($20,000) = 380 b) Calculate the price elasticity of demand. 20 6 .31 380 QP PQ c) Calculate the income elasticity of demand … ................
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