(Answered) Suppose the market demand function is qd 8i - 9p1

Economics

Suppose the market demand function is Qd = 8I - 9P1 - 0.5P2 where I is income in $1,000 and P1 is price of a related good.

(a) What is the relation between these two goods?

(b) Calculate the income, cross price, and own price elasticity of demand if I = $40,000, P1 = $10 and P = $15.

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