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What is the cross-price elasticity of demand

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Reference no: EM1315410

Q. Assume the demand curve for a product is given by Q = 10 - 2P + Ps.
Where P is the price of the product also Ps is the price of a substitute good. The price of a substitute good is $2.00.

(a) Assume P = $1.00. Illustrate what is the price elasticity of demand? Illustrate what is the cross-price elasticity of demand?

(b) Assume the price of the good, P, goes to $2.00. Now illustrate what is the price elasticity of demand? Illustrate what is the cross-price elasticity of demand?

Reference no: EM1315410

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