1 Questions
Given a demand function: Qb = 100 –30Pb – 20Pc + 0.005I, where, Qb=Quantity demanded of bubblegum in billion packs, Pb=Price of bubblegum per pack (R5), Pc=Price of a pack of chips (R1), and I=Annual household income (R25000), you are asked to calculate the income elasticity of demand.
Given a demand function: Qb = 100 –30Pb – 20Pc + 0.005I, where, Qb=Quantity demanded of bubblegum in billion packs, Pb=Price of bubblegum per pack (R5), Pc=Price of a pack of chips (R1), and I=Annual household income (R25000), you are asked to calculate the income elasticity of demand.
Solve a problem involving the calculation of income elasticity of demand using a given demand function. Understand the relationship between income and quantity demanded. This quiz is based on the concept of elasticity in microeconomics.
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
Get started for free
