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Question: question 4 you are employed as an economic consultant to...

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Question 4 You are employed as an economic consultant to the regional planning office of a larse metropolitan area, and your task is to estimate the demand for hospital services in the area. Your estimates indicate that the own-price elasticity of demand equals-0.25, the income elasticity of demand equals 0.45, the cross-price elasticity of demand for hospital services with respect to the price of nursing home services equals -0.1 ant the elasticity of travel time equals-0.37 Use this information to project the impact of the following changes on the demand for hospital services a) Average time to the hospital diminishes by 5 percent duerto overall improvements in the public b) c) d) transportation system The price of nursing home services decreases by 10 percent Average real income decreases by 10 percent The hospitals are forced to increase their prices by 2 percent
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