Calculating cross price elasticity of demand

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The demand function for VCRs has been estimated to be Qv = 123 - 1.7Pt + 46 Pm - 2.1Pv -5M, where Qv is the quantity of VCRs,Pt is the price of a videocassette,  pmis the price of a movie, Pv is the price of a VCR, and M  is income. Based on this information, answer the following questions

  1. Are VCRs normal or inferior goods?
  2. Are movies substitutes or complements for VCRs?
  3. What additional information is needed to calculate the price elasticity of demand for VCRs?

Reference no: EM1312424


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