The demand function for bicycles in Holland has been estimated to be QQ = 2000 + 15Y - 7.5P, where Y is income in thousands of euros, Q is the quantity demanded in units, and P is the price per unit.
When P = 150 euros and Y = 15,000 euros, what is:
The price elasticity of demand?
a. -0.24
b. -1.02
c. -7.5
d. -0.50
The income elasticity of demand? (multiple choice)
a. 0.20
b. 0.14
c. 1.02
d. 1.00
