Question

Demand for Orange Juice is given as
Qd = 5000 – 2500 P + 1200 I + 650 E – 255 Ps
Suppose Income is I = Rs.500, Expectations E = 55, and Price of Ps = Rs 25.
a. Find the Demand Equation.
b. Using the demand function from part a.,
Calculate Elasticity of Demand for price range of Rs.125 and Rs.155.
c. What will be the ‘Price Elasticity of Demand’ at P = Rs.125?
d. Interpret the Elasticity of Demand calculated in (C) above.

Answer 1

Answer:

Qd = 5000 – 2500 P + 1200 I + 650 E – 255 Ps. Suppose Income is I = Rs.500, Expectations E = 55, and Price of Ps = Rs 25.

Using The Demand Function From Part A., Calculate Elasticity Of Demand For Price Range Of Rs.125 And ... Answer a) Qd=5000 - 2500P+ 1200I+ 650E -255Ps at I=500, E=55 , Ps= 25.

Thanks..