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Where p is the price of the product and ps is the price of

Suppose the demand curve for a product is given by

Q = 10 - 2P + Ps

where P is the price of the product and Ps is the price of a substitute good. The price of the substitute good is $2.00. a. Suppose P = $1.00. What is the price elasticity of demand? What is the cross-price elasticity of demand?

b. Suppose the price of the good, P, goes to $2.00. Now what is the price elasticity of demand, and what is the cross-price elasticity of demand?

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Solution Preview :

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Microeconomics: Where p is the price of the product and ps is the price of

Reference No:- TGS0660121

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Solution Preview :

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Microeconomics: Where p is the price of the product and ps is the price of

Reference No:- TGS0660121

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