Minggu, 04 Desember 2011

some example of how to answer questions about price elastic!

Question : 1. The price of good T falls by 20 % as a result the demand for subtitute good rise by 40 %. What is XED for good X?

How to answer = 
1. calculation : quantity X  =  40% = -2%
                            price T        -20%


2. give an explaination of the answer = if price of good T rises for 1 %, Quantity demanded of good X falls 2 %

3. State the type of the product given by the answer = the product is a complementary good.

well done!









Tidak ada komentar:

Posting Komentar