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## Slides

## Quiz

My answer for the last question contains an error — for some reason, I set the elasticity equal to -3 instead of -2. Here are the correct calculations for the first part:

(1)\begin{eqnarray} \frac{-5P}{220-5P}&=&-2\\ P&=&440/15=29.3\\ Q&=&220-440/3=73.3\\ \end{eqnarray}

And here's how to get the elasticities in parts (b) and (c):

(2)\begin{eqnarray} \text{income elasticity of Demand}&=&2\left(\frac{60}{73.3}\right)>1\\ |\text{price elasticity of Demand}|&=&\left|-5\left(\frac{80/3}{73.3}\right)\right|>1 \end{eqnarray}