Suppose the demand function is given by Q_x^d = 10P_x^0.9 P_y^0.5 M^0.22 H.Then the cross-price elasticity between goods x and y is: A) 0.9. B) 0.5. C) 0.22. D) −0.5.

Name: Suppose the demand function is given by Q x d = 10P x 0.9 P y 0.5 M 0.22 H.Then the cross-price elasticity between goods x and y is: A) 0.9. B) 0.5. C) 0.22. D) −0.5.
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Question

Quizplus · Accepted Answer

The cross-price elasticity between goods x and y is given by the exponent of P_y in the demand function, which is 0.5.

Suppose the Demand Function Is Given by Qxd = 10Px0

Suppose the Demand Function Is Given by Q_x^d = 10P_x⁰