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PM = $20000 PG = $1.00 I = $15000 A = $10000
This function is:
QT = 200 -.01PT +.005PM -10PG +.01I +.003A
Calculate the point advertising elasticity of demand with PT = 30000 and A = $10000. Use QT corresponding to PT = $30000 (which should make QT = 170). Other variables and their values are given at the top, before question #1. Does this elasticity indicate that the demand for Toyotas is relatively responsive to changes in advertising expenditures? Explain why or why not.
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