Managerial Economics 7th Edition by Paul Keat ,Philip Young,Steve Erfle

Exercise 4

The equation for a demand curve has been estimated to be Q = 100 - 10 P + 0.5 Y , where Q is quantity, P is price, and Y is income. Assume P = 7 and Y = 50.
a. Interpret the equation.
b. At a price of 7, what is price elasticity
c. At an income level of 50, what is income elasticity
d. Now assume income is 70. What is the price elasticity at P = 8