Suppose demand for good A is givenby Qa=500-10Pa+2Pb+0.7Y where PA is the price ofgood A, Pb is the

Suppose demand for good A is givenby   Qa=500-10Pa+2Pb+0.7Y where PA is the price ofgood A, Pb is the price of some other good b and Y is income.Assume that Pa is currently $10, Pb is currently $5 and Y iscurrently $100.

i) What is the elasticity of demand for good A at the currentsituation? ii) What is the cross-price elasticity of demand for good A withrespect to good B at the current situation? iii) Based on what you found in ii, what can you conclude aboutthe relationship between good A and good B? Attached

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