Price elasticity, income elasticity and cross elasticity of demand: แบบฝึกหัด

If two goods are complements, what is the expected sign of their cross-price elasticity of demand \( (XED) \)?

A firm faces a price elasticity of demand (PED) of \(0.6\) for its product. If the firm decides to increase the price of the product by \(10\%\), which of the following correctly describes the impact on the quantity demanded and the firm\'s total revenue?

A specific good is found to have an income elasticity of demand (YED) of \(-1.5\) and a cross elasticity of demand (XED) of \(+0.8\) with respect to a related Good Z. How should this good and its relationship with Good Z be classified?

The diagram shows a downward-sloping linear demand curve. As we move down the curve from the price axis (y-intercept) toward the quantity axis (x-intercept), how does the price elasticity of demand (PED) change?

A company identifies that its product has a price elasticity of demand (PED) of \(-1.25\) and an income elasticity of demand (YED) of \(+2.0\). If a recession causes average consumer incomes to fall by \(5\%\), by what percentage must the company change its price to ensure the quantity demanded remains constant?

A firm determines that the cross elasticity of demand (\(XED\)) for its product with respect to a competitor's price is \(+1.8\), and its income elasticity of demand (\(YED\)) is \(-0.6\). Explain the economic relationship between the two products and the classification of the firm's product, justifying your answer using the provided coefficients.

A manufacturing firm produces two goods: Good A and Good B. The firm currently sells 5,000 units of Good A per month at a price of \(\$10\). Market research reveals the following elasticity coefficients for Good A:
- Price Elasticity of Demand (PED): \(-0.8\)
- Income Elasticity of Demand (YED): \(+1.5\)
- Cross Elasticity of Demand (XED) with respect to the price of Good B: \(-0.5\)

(a) If the firm decides to increase the price of Good A by \(10\%\), calculate the new quantity demanded and explain the effect on the firm's total revenue. [3]
(b) The economy enters a period of growth where consumer incomes rise by \(4\%\). Calculate the resulting percentage change in quantity demanded for Good A and classify the type of good. [2]
(c) Explain the economic relationship between Good A and Good B based on the XED coefficient and describe how a \(20\%\) decrease in the price of Good B would affect the demand for Good A. [2]