Posted by **Imran** on Friday, November 2, 2012 at 10:54pm.

Assume that demand for product A can be expressed as QA = 500 ¨C 5PA + 3PB and demand for

product B can be expressed as QB = 300 ¨C 2PB + PA. Currently, market prices and quantities for

these goods are PA, = 5, PB = 2, QA = 481, and QB = 301.

a. Suppose the price of product B increases to 3. What happens to the quantity demanded of

both products?

b. Calculate the arc cross©\elasticity between product A and product B using prices for product

B of 2 and 3.

c. Are these goods substitutes or complements?

## Answer This Question

## Related Questions

- Help math plz - A firm is deciding whether or not to place a product on the ...
- managerial economics - Exercise 1 The marketing manager has estimated the ...
- Economics - Could you please check these thanks. Directions match each item with...
- mathematical economics - suppose a monopolist produces and sells a product ona 2...
- Check Answers SOCIAL STUDIES PLEASE - Why do business seek an equilibrium price...
- economics - suppose the demand curve for a product is given by Q=10-2P+Ps1,where...
- supply and demand - -what happens if a shortage of a product currently exists in...
- Economics - Assume the demand curve for concert tickets is Qd= 300 - c*p and the...
- Business Math - 3.) The demand equation for a certain product is q=500-40p+p^2 ...
- Managerial Economics - Given the demand & supply Function for product 'x' at ...

More Related Questions