00:01
So here we're given some information about the price elasticity and cross elastities and income elasticity.
00:06
We're given four elasticity, right? so i'm going to call, label these things soft drinks, sd and iced tea, it.
00:17
We know that the percentage change in the quantity of soft drinks with respect to the percentage change in the price of soft drinks is equal to two.
00:28
We know that the percentage, and this should be a negative, right? remember, economists slack on leave on negatives when it comes to elasticity is of demand.
00:38
Demand curve sloped down, the elasticity better be negative.
00:42
The cross -price elasticity of demand of soft drinks for iced tea.
00:50
Demand of soft drinks, so i'm going to say that's delta qsd over the percentage change in the price of ice tea.
00:58
So this is a cross elasticity.
01:00
So note how the units are mixed, right? we're saying how much is a quantity of soft drink demand responds to the price of ice tea? we're told that the cross price elasticity of demand for soft drinks, quantity sd with respect to the price of popcorn, let's call that p, is equal to minus two.
01:24
And that the income elasticity of demand, the change in.
01:30
Quantity of soft drinks with respect to the change in income is equal to 1 .2.
01:37
So you have to know what different elasticity mean, right? an elasticity of demand, a cross -price elasticity, so on and so forth.
01:47
So for a, we're looking at this one, at this one, right? this is the relevant consideration for a.
01:53
And we see that it's negative...