Stats Solutions

[Solution] The demand curve for a product is given by Q_x^d=1,000-2 P_x+.02 P_z where P_z=,) 400$ What is the own price elasticity of demand when P_x=,) 154

Question: The demand curve for a product is given by \(Q_{x}^{d}=1,000-2 P_{x}+.02 P_{z}\) where \(P_{z}=\\) 400$

  1. What is the own price elasticity of demand when \(P_{x}=\\) 154 ?$ Is demand elastic or inelastic at this price? What would happen to the firm's revenue if it decided to charge a price below $\$ 154 ?$
  2. What is the own price elasticity of demand when \(P_{x}=\\) 354 ?$ Is demand elastic or inelastic at this price? What would happen to the firm's revenue if it decided to charge a price above $\$ 354 ?$
    \(c\). What is the cross-price elasticity of demand between good \(X\) and good \(Z\) when \(P_{x}=\\) 154 ?$ Are goods \(X\) and \(Z\) substitutes or complements?
    Price: $2.99
    Solution: The downloadable solution consists of 2 pages
    Deliverable: Word Document


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