Suppose widgets have a price elasticiy of demand equal to -1.95 and a cross elasticity of demand equal to 2 with dundles. What are the pricing options for a firm that sells widgets? Explain. (b) If the quantity demand for apples is given by: _Q__D _= 300 − 2_._55_p__A _+ 7_._62_p__B _+ 0_._75_Y _ if _p__A _= 90 cents, _p__B _= 50_cents _and _Q__D _= 860. Calculate and interpret the income elasticity of demand for apples.

/in /by

Suppose widgets have a price elasticiy of demand equal to
-1.95 and a cross elasticity of demand equal to 2 with dundles. What
are the pricing options for a firm that sells widgets? Explain.

(b)   If the quantity demand for apples is given by:

                      _Q__D
_= 300 − 2_._55_p__A _+ 7_._62_p__B _+
0_._75_Y            _

if _p__A _= 90 cents, _p__B _= 50_cents _and _Q__D _= 860.

Calculate and interpret the income elasticity of demand for apples.

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