Question Suppose the demand function for good X is given by Qdx = 15-0.5Px-0.8Py where Qdx is the quantity demanded of good X, Px is the price of good X, and Py is the price of good Y, which is related to good X. Using the midpoint method, if the price of good X is constant at $5 and the price of good Y decreases from $5 to $2, the cross price elasticity of demand is about… so I plug in Qdx = 15-.5($5)-.8($5) and I get 8.5 units of x sold if price of x is constant at $5 and price of y is $5 Qdx = 15-.5($5)-.8($2) and I get 10.9 units of X if the price of x is constant at $5 and the price of y is $2 but now I feel stuck I am not even sure if I have set the problem up correctly to begin with Yikes I need help the answer choices are listed below -0.29, and X and Y are substitutes. -2.29, and X and Y are complements. -2.9, and X and Y are complements. -0.29, and X and Y are complements.
Question
Suppose the demand function for good X is given by Qdx = 15-0.5Px-0.8Py where Qdx is the quantity demanded of good
X, Px is the price of good X, and Py is the price of good Y, which is related to good X.
Using the midpoint method, if the price of good X is constant at $5 and the price of good Y decreases from $5 to $2, the cross price elasticity of demand is about… so I plug in Qdx = 15-.5($5)-.8($5) and I get 8.5 units of x sold if price of x is constant at $5 and price of y is $5
Qdx = 15-.5($5)-.8($2) and I get 10.9 units of X if the price of x is constant at $5 and the price of y is $2
but now I feel stuck I am not even sure if I have set the problem up correctly to begin with Yikes I need help
the answer choices are listed below
-0.29, and X and Y are substitutes.
-2.29, and X and Y are complements.
-2.9, and X and Y are complements.
-0.29, and X and Y are complements.
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