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4. Suppose the annual demand function for the Honda Accord is QD - 430-01PA+01Pc-10Pa where PA and Pc are the prices of Accords and Camrys and Po is the price of gas. Assume this that year the price of an Accord and the price of a Camry are both $20,000 and the price of gas is $3 per gallon. You are to use the point formula for calculating the following elasticities. Given the prices of Accords, Camrys and gas, what is the quantity demanded of accords? a. a. Calculate the price elasticity of demand for Accords. Interpre t the elasticity coefficient. b. Calculate the cross price elasticity of demand of Accords with respect to a change in the price of Camrys. Interpret the elasticity coefficient. c. Calculate the cross price elasticity of demand for Accords with respect to a change in the price of gasoline. Interpret the elasticity coefficient.
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