Question

Given Q=400-8P + 0.05Y. Where P=15 and Y=200. Fina the price elasticity of demand and income elasticity of demand

Answer 1

$$Q=400-8\times15+0.05\times200=290$$

$$E_p=-8\times\frac{15}{290}=-0.41$$

$$E_Y=0.05\times\frac{200}{290}=0.03$$