Please assist with the given problems.
Q= 400 - 3P + 4I + 0.6A
Q = quantity demanded P = price I = per capita disposable income A = advertising expense
Population is constant
1) Over the next 10 years per capita, disposable income is expected to rise by $5,000. What effect will this have on the firm's sales?
2) How much should it raise prices to offset the effect of the increase in per capita disposable income?
3) If prices are raised by this amount, will it increase or decrease the price elasticity of demand?
Please describe steps clearly and simply.