Determine the income elasticity of demand
Econometrics
The demand for haddock has been estimated as log Q = a=b log p=cl log I = d log Pm Where Q= quantity of haddock sold in New England P = price per pound of haddock I =a measure of personal income in the New England region and Pm= an index of the price of meat and poultry. If b= -2.174, c= 0.461, and d= 1.909. a) Determine the price elasticity of demand . b) Detrmine the income elasticity of demand. c) Determine the cross elasticity of demand. d) How would you charaterize the demand for haddock? e) suppose disposable income is expected to increase by 5 percent next year. Assuming all other factors remain constant, forecast the percentage change in the quantity of haddock demanded next year.
