The demand for haddock has been estimated as:
log Q= a+b log P+c log I + d log Pm
where Q= quantity of haddock sold in New England
P= price per pound of haddock
I- a measure of personal income in the New England region
Pm= an index of the price of meat and poultry
1. If b = 2.174, c= 0.461 and d= 1.909:
Determine the price elasticity of demand
Determine the income elasticity of demand
Determine the cross price elasticity of demand
How would you characterize the demand for haddock?
Suppose disposable income is expected to increase by 5% next year. Assuming all other factors remain constant, forecast the percentage of change in the quantity of haddock demanded next year.