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    Question

    The demand function for a good is X = 5000 – 10Px

    + 15Py + 0.2Y, where in Px is the price of X, Py is the price of another good and Y is the income. Calculate the income elasticity of demand when Y = 2000, P(x) = 25 and P(y) = 40
    A 0.20 Correct Answer Incorrect Answer
    B 0.10 Correct Answer Incorrect Answer
    C 0.70 Correct Answer Incorrect Answer
    D 0.07 Correct Answer Incorrect Answer

    Solution

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