The coconut oil demand function (Bushena and Perloff, 1991) is Q=1,200-9.5p+16.2pp +0.2Y, where Q is the quantity of coconut oil demanded in thousands of metric tons per year, p is the price of coconut oil in cents per pound, pp is the price of palm oil in cents per pound, and Y is the income consumers. Assume that p is initially 45 cents per pound, pp is 29 cents per pound, and Q is 1,350 thousand metric tons per year. Calculate the price elasticity of demand for coconut oil and the cross-price elasticity of demand (with respect to the price of palm oil). The price elasticity of demand is e= (Enter your response rounded to three decimal places and include a minus sign.)

The coconut oil demand function (Bushena and Perloff, 1991) is Q=1,200-9.5p+16.2pp +0.2Y, where Q is the quantity of coconut oil demanded in thousands of metric tons per year, p is the price of coconut oil in cents per pound, pp is the price of palm oil in cents per pound, and Y is the income consumers. Assume that p is initially 45 cents per pound, pp is 29 cents per pound, and Q is 1,350 thousand metric tons per year. Calculate the price elasticity of demand for coconut oil and the cross-price elasticity of demand (with respect to the price of palm oil). The price elasticity of demand is e= (Enter your response rounded to three decimal places and include a minus sign.)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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