The empirical demand function is estimated in log-linear form as where is the estimated number of units of good X demanded, P is the price of X, M is income, and is the price of related good Y. (All parameters estimates are significantly different from zero at the 5 percent level.)
-Calculate the following elasticities:
(1) Price elasticity: = __________.
(2) Cross-price elasticity: = __________.
(3) Income elasticity: = __________.

Question

The empirical demand function is estimated in log-linear form as  where  is the estimated number of units of good X demanded, P is the price of X, M is income, and  is the price of related good Y. (All parameters estimates are significantly different from zero at the 5 percent level.)
-Calculate the following elasticities:
(1)	Price elasticity:	  = __________.
(2)	Cross-price elasticity:	  = __________.
(3)	Income elasticity:	  = __________.

Quizplus · Accepted Answer

The Answer of The empirical demand function is estimated in log-linear form as  where  is the estimated number of units of good X demanded, P is the price of X, M is income, and  is the price of related good Y. (All parameters estimates are significantly different from zero at the 5 percent level.)
-Calculate the following elasticities:
(1)	Price elasticity:	  = __________.
(2)	Cross-price elasticity:	  = __________.
(3)	Income elasticity:	  = __________.

The Empirical Demand Function Is Estimated in Log-Linear Form as