3. Problem 3Consider that the own price elasticity of demand for X is -0.5, income elasticity is 1,advertising elasticity is 1.5, and cross price elasticity between X and Y is 2.3.1 Determine the change in consumption of X if the Px decreases by 3 percent.3.2 Determine the change in consumption of X if the Py increases by 5 percent.3.3 Determine the change in consumption of X if advertising decreases by 3 percent.3.4 Determine the change in consumption of X if income increases by 5 percent.

Change in consumption – Refers to the change in consumption (of a good, service, or general…

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ity of demand for ss price elasticity nsumption of X if nsumption of X if nsumption of X if nsumption of X if

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

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Question

3. Problem 3
Consider that the own price elasticity of demand for X is -0.5, income elasticity is 1,
advertising elasticity is 1.5, and cross price elasticity between X and Y is 2.
3.1 Determine the change in consumption of X if the Px decreases by 3 percent.
3.2 Determine the change in consumption of X if the Py increases by 5 percent.
3.3 Determine the change in consumption of X if advertising decreases by 3 percent.
3.4 Determine the change in consumption of X if income increases by 5 percent.

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