suppose the demand curve for a product is given by Q=10-2P+Ps1,where P is the price of the product and Ps is the price of a substitute good. the price of the substitute good is $2.00.
a)suppose P=$1.00, what is the price elasticity of demand?what is the cross- price elasticity of demand?
b)suppose the price of the good, P, increases to $2.00. Now what is the price elasticity of demand, and what is the cross-prices elasticity of demand?
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Let us say the price of widgets is $1.00. At this price, consumers demand 10 widgets. Now the widget seller increases the price to $1.50. At this new higher price, quantity demanded falls to 9 widgets. Are widgets elastic or inelastic? Please show your work.
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