Suppose that a representative Norwegian family\'s demand for milk depends on the

Question

Suppose that a representative Norwegian family's demand for milk depends on the price p > 0 and the family's income>0according to the function: E(p,r)Ap6 where A, a and b are positive constants. (a) Find a constant k (in terms of the constants a and b) such that Op (b) Based on data for the period 1925-1935, it is estimated that Norwegian milk demand could be represented by equation (1) with a 1.5 and b 2.08. Calculate the value of k in this case. (c) For the values of a and b in part (b), suppose moreover that p p(t.06)'and r r(t) ro (1.08) in (1) are both functions of time t where po is the price and ro is the income at time t0. Hence, E(p(t),r(t)) Et) is also a function of time t. Calculate the proportional rate of growth, that is, the derivative of function In (E(t))

Explanation / Answer

a) .. Firstly we will put the value of E(p,r) , then we will differentiate the whole equation .... Now we will rearrange the equation by simplifying it , we will get the value of k that

k = b-a

b) as we put the values of a and b in value of k then we will find after a little calculation that if a=1.50 and b=2.08 then

k=0.58

c) here the proportional rate is zero

Here is the answer of ur question.

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.