ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Question
100%

Using the homogeneity condition and given a PED of -.28 with a YED of -1.28: What is the XED?

A. -0.56

B. +0.56

C. -1.56
 
D. +1.56
Expert Solution
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Step 1

The homogeneity condition implies that the sum of own price elasticity, income elasticity, and cross price elasticity is equal to one.  

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