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Sagot :
Answer:
Explanation:
From the information given:
[tex]Q^d_{gas} = 15 - 3 P_{gas} + 0.02 I +0.11 P_{BT} -0.008P_{AUTO}[/tex]
[tex]Q^d_{gas} = 15 - 3 (30) + 0.02(40000) +0.11 (25) -0.008(22000)[/tex]
[tex]Q^d_{gas} = 15 - 90 + 800+2.75 -176[/tex]
[tex]Q^d_{gas} = 551.75[/tex]
So, Income elasticity = [tex]\dfrac{dQ^d}{dI}*\dfrac{I}{Q^d}[/tex]
[tex]= 0.02 *\dfrac{40000}{551.75}[/tex]
= 1.45 which is greater than 1
It is positive → i.e. Normal good
The cross elasticity = [tex]\dfrac{dQ^d}{dPBT}*\dfrac{PBT}{Q^d}[/tex]
[tex]= 0.11 \times \dfrac{25}{551.75}[/tex]
= 0.0049 which is greater than 0
It is positive → hence they are substituents.
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