Question 1
Today, the market’s diversity provides numerous low calorie microwavable food options. In addition, increases in the income of individuals, people have the capacity to live easier lifestyles and this has led to increase in demand for certain products of preference.
The quantity demanded equation of the product is given by;
Qd = -5200 – 42P + 20Px + 5.2I + 0.2A + 2.5M
Therefore, the elasticity of P (partial differentiation)
δQdp = -42 Assuming all other independent variables are constant
Hence elasticity of P = (δQdp). (δPQ )
= -42(P-5200-42P+5.2I+0.2A+2.5M)
For the 3-pack unit = -42(5-5200-425+206+5.25500+0.210,000+2.5(5000))
Therefore = -42 (537810) = -212656 = -0.007906
Solving for Px
ΔQdp = 20(637810)=0.010579
Solving for I
QdI=5.2550037810=0.7564
Solving for A
QdI = 0.2(10,00037810) = 0.0528
Solving for M
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