Question

Demand for Orange Juice is given as Qd = 5000-2500 P + 1200 I +650E - 255 PS Suppose Income is I = Rs.500, Expectations E = 55, and Price of Ps= Rs 25. 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. 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.

Find the Demand Equation.

Using the demand function from part a.,

Calculate Elasticity of Demand for price range of Rs.125 and Rs.155.

What will be the ‘Price Elasticity of Demand’ at P = Rs.125?

Interpret the Elasticity of Demand calculated in (C) above.