Question The table shows the average income of households and the quantity demanded of products M and N at different prices and levels of income. Year 1 2 3 Average Income $46,000 46,000 46,000 52,000 Price of M $2.30 2.80 2.80 2.80 Quantity of M 110 105 100 110 Price of N $19 19 29 29 Quantity of N 850 800 750 4 790 a) What is the price elasticity of demand for product M between years 1 and 2? Round your answers to 2 decimal places. b) What is the price elasticity of demand for product N between years 2 and 3? Round your answers to 2 decimal places. c) What is the income elasticity of demand for product M between years 3 and 4? Round your answers to 2 decimal places. d) What is the income elasticity of demand for product N between years 3 and 4? Round your answers to 2 decimal places. e) What is the cross-elasticity of demand of product M for a change in the price of product N between years 2 and 3? Round your answers to 2 decimal places and remember to enter a minus (-) sign to indicate negative values.
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Transcribed Image Text: The table shows the average income of households and the quantity demanded of products M and N at different prices and levels of income. Year 1 2 3 Average Income $46,000 46,000 46,000 52,000 Price of M $2.30 2.80 2.80 2.80 Quantity of M 110 105 100 110 Price of N $19 19 29 29 Quantity of N 850 800 750 4 790
a) What is the price elasticity of demand for product M between years 1 and 2? Round your answers to 2 decimal places. b) What is the price elasticity of demand for product N between years 2 and 3? Round your answers to 2 decimal places. c) What is the income elasticity of demand for product M between years 3 and 4? Round your answers to 2 decimal places. d) What is the income elasticity of demand for product N between years 3 and 4? Round your answers to 2 decimal places. e) What is the cross-elasticity of demand of product M for a change in the price of product N between years 2 and 3? Round your answers to 2 decimal places and remember to enter a minus (-) sign to indicate negative values.
More Transcribed Image Text: The table shows the average income of households and the quantity demanded of products M and N at different prices and levels of income. Year 1 2 3 Average Income $46,000 46,000 46,000 52,000 Price of M $2.30 2.80 2.80 2.80 Quantity of M 110 105 100 110 Price of N $19 19 29 29 Quantity of N 850 800 750 4 790
a) What is the price elasticity of demand for product M between years 1 and 2? Round your answers to 2 decimal places. b) What is the price elasticity of demand for product N between years 2 and 3? Round your answers to 2 decimal places. c) What is the income elasticity of demand for product M between years 3 and 4? Round your answers to 2 decimal places. d) What is the income elasticity of demand for product N between years 3 and 4? Round your answers to 2 decimal places. e) What is the cross-elasticity of demand of product M for a change in the price of product N between years 2 and 3? Round your answers to 2 decimal places and remember to enter a minus (-) sign to indicate negative values.
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a) Price elasticity of cemand-forponduct M betcoeen Yearl and Yearz:-{:[p_(1)=$2.30,q_(1)=110],[p_(2)=2.80,q_(2)=105]:}Price elasticity of demand =((q_(2)-q_(1))/(q_(2)+q_(1)))/(L)xx100{:[=((105-110)/((105-110)/(2))xx100)/((2.80-2.30)/((2.8012.30)/(2))xx100)],[=(-4.65%)/(19.61%)],[=-0.24]:}:. Price elasticity of demand =0.24b) Price elasticily of demand for product N Year 2 and Year3 :-{:[p_(1)=19,q_(1)=800],[p_(2)=29,q_(2)=750]:}Price elasticity of demand =(q_(2)-q_(1))/((q_(2-1)q_(1))/(2))xx100{:[((P_(2)-P_(1))/(P_(2)+P_(1)))/(2)xx100],[=((750-800)/(750+800))/(2)xx100],[((2 ... See the full answer