Question

0, 0.310.04P,-0.02P, in in the regional market for housing demand for single detached homes depends on the price of the house. P. consumer income, and the price of a road good, townhouses. Pr. The demand equation average consumer Income 500,000 and the average price of what is 1200,000. Making the stations, we got , 29,200 -0.02P. This is our current demand equation Suppose income changes from $80.000 $72,000. What is the income elasticky of demand for housing when the price is $260.000? Click the icon to view the derivation of the current demand equation The income elasticity of demand for housing when the price is $200.000 and income changes from $60.000 to $72.000 is EN- (Round to two decimal places as needed) This Is Housing is good. unitate perfectly perfectly inelastic

Answer 1

= 0.3N+0.04Pt - 0.020H When N= 60,000 and pt = 280,000 Od = 29,200 -0.02 Pu P4 - 2.50,000 Od - 279200 -0.024.260,000) - = 29200 - 5200 I dd - 29000 When N= 72,000 Then dd = 0.3172,000) + 0.04/280,000) - 0.02 1 260,000) = 21600 + 11200 - 5200 Od = 27600 - 27600 % change in a = (127600 27600 -24ooo 24000) ico 97602t zoon 3600 25800) 100 - 13.95% 6 change in N. 172000 - 60,000) I loo Гоо о 16ə oos1 2

(12000 100 16ooo 18.18% me Income elastriety of demand EN % change in od to change in N 0.77 18.18 This is inelastic demand because it it is less than al 13.95 Housing income is a roomal good elasticity of housing because is partine.