Determining-interpreting elasticities of demand

Reference no: EM1367138

In Qx = 3-0.5 in Px - 2.5 In Py + lnM + 2lnA

ln being natural log

Where

Px = $10
Py = $4
M = $20,000
A - $250

a) Determine the own price elasticity of demand and state whether demand is elastic, inelastic or unitary elastic

b) Determine the cross price elasticity of demand between good X and good Y and state whether these two goods are substitutes or compliments

c) Determine the income elasticity of demand state whether good X is normal or inferior

d) Determine the own advertising elasticity of demand

Reference no: EM1367138

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