Managerial Economics & Business Strategy 8th Edition by Michael Baye,Jeff Prince

Exercise 14

Suppose the own price elasticity of demand for good X is -3, its income elasticity is 1, its advertising elasticity is 2, and the cross-price elasticity of demand between it and good Y is - 4. Determine how much the consumption of this good will change if:
a. The price of good X decreases by 5 percent.
b. The price of good Y increases by 8 percent.
c. Advertising decreases by 4 percent.
d. Income increases by 4 percent.