2. For each of the explanatory variables, P, CP, M and PE, calculate the respective demand elasticities for Hind Oil Industries’ product in the month September 2015. Remember to show all calculations. What additional information about Maa mustard oil do these values provide?

ANSWER 2 • Price elasticity of demand =( DQ/DP) * P / Q For September Q = 3934.25 – 121.15P + 113.49CP – 0.31M + 7.99PE + 53.66 S0 Ep = -121.15*P/Q • Income elasticity of demand =( DQ/DM) * PM/ Q For September Q = 3934.25 – 121.15P + 113.49CP – 0.31M + 7.99PE + 53.66 S0 Ep = -0.31*M/Q • Price CP of demand =( DQ/Dcp) * cp/ Q For September Q = 3934.25 – 121.15P + 113.49CP – 0.31M + 7.99PE + 53.66 S0 Ep = 113.49*CP/Q • Price elasticity of demand =( DQ/DPE) * PE / Q For September Q = 3934.25 – 121.15P + 113.49CP – 0.31M + 7.99PE + 53.66 S0 Ep = 7.99*PE/Q