The question is in the screenshot below………………………………………. Demand for books is given by formula Q = 101’ — PC + Y, where P is book price and Pc standfor price of cookies. What is the income elasticity of demand at P=2, Pc=1, and Y=5? Is thedemand elastic or inelastic in income, is it inferior or nonnal? What is the cross-price elasticity atP=2, Pc=1, and Y=15[}? Are books and cookies complements or substitutes? Explain.

The question is in the screenshot below……………………………………….

Demand for books is given by formula Q = 101’ — PC + Y, where P is book price and Pc standfor price of cookies. What is the income elasticity of demand at P=2, Pc=1, and Y=5? Is thedemand elastic or inelastic in income, is it inferior or nonnal? What is the cross-price elasticity atP=2, Pc=1, and Y=15[}? Are books and cookies complements or substitutes? Explain.

 
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