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Find the own-price elasticity of demand for product

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Reference no: EM133082000

Suppose a demand xX Y s for a product X has been estimated to the have the following demand function:

Q = 1.5 -3.0P+ 0.8 I + 2.0 P- 0.6 P+ 1.2 A

where x, y, and s are related products, I is the level of income and A is advertising. Suppose that in a given year, the values of each item are as follows: PX = 2, I = 2.5, PY = 1.80, PS = 0.50, A = 1.

a. Find QX for this particular year.

b. Find the own-price elasticity of demand for product X. Is demand for X elastic or inelastic?

c. Find the cross-price elasticity with respect to product Y. Are X and Y complements or substitutes?

d. Find the cross-price elasticity with respect to product S. Are X and S complements or substitutes?

e. Find the elasticity of demand of QX with respect to advertising.

Reference no: EM133082000

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