Demand for pizza ?? depends on the price of pizza ?? nd the price of salad ?? and is given as ?? = 100?? – 4??^2. Restrict attention to prices where ?? = 0
(a) Find a formula for the price elasticity of demand for pizza as a function of ?? and ?? only (that means not a function of x).
(b) What happens to the demand for pizza (with respect to own price ????) as the price of salad ?? increases? Does it become more elastic, less elastic, stay the same, or depend on the prices ?? and ??? Explain.
(c) What is the cross-price elasticity of demand? Use your result to determine if the goods are substitutes or complements.