Compute elasticities of demand and explain briefly for each the relevance of this information in decision-making by the firm. The data has been generated in each case from recent market experience or from test markets.
1. Current p of dinner =$100, q=60; New p = $80, q=70
2. Current symphony ticket p=$90, q=2000; New p= $50, q=4000
3. Current monthly income =$10,000, monthly q=6 of dinners out; new income = $8000, q=4
4. Current p of good y = $50, q of good x=100; new p of y = $40,q of x=90 (p of x has not changed)