unit-4-demand-function-and-elasticity

Unit-4 Demand Function and Elasticity

In this unit we will be focussing on the consumer’s demand function for a good .

For the following demand schedule, find cross elasticity of demand for good X when price of Y falls from Rs.5 to Rs.4. Comment on the nature of good.

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Learning Pundits Content Team

Written on Jun 26, 2019 6:22:00 PM

  • Cross elasticity = { 3 / ( 67 + 70 ) } / {-1/ ( 5+4 )} = -27 / 137. = 0.197 
  • The good is a complement.