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After a careful statistical analysis, the Chichester Company concludes that the demand function for its product is
Q=500- 3P + 2Pr + 0.1I
Where Q is the quantity demanded for its product, P is the price of its product, Pris the price of its rival's product, and I is per capita disposable income (in dollars). Assume P=$10 Pr=$20 I=$8,000
a. What is the price elasticity of demand for the firm's product?
b. What is the income elasticity of demand for the firm's product?
c. What is the cross elasticity of demand between its product and its rival's product?
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