Given the following data for the widget market, calculate
the own-price, cross-price, and income elasticities for widgets, where:
Q = the number of widgets sold, in millions,
Pw = the price of a widget, in $,
Pg = the price of a gidget, in $, and
Y = income, in $ billions.
|
Period |
Q |
Pw |
Pg |
Y |
|
1 |
100 |
10 |
10 |
1000 |
|
2 |
50 |
15 |
10 |
1000 |
|
3 |
70 |
15 |
20 |
1000 |
|
4 |
80 |
15 |
20 |
1200 |
|
|
|
|
|
|
What do these elasticities tell you about widgets?