Suppose the demand function for a firm's product is given by
In Px = 10 In Qdx + 2 In Py - 5 In M + 3 In A
where:
Px = $18
Py = $9
M= $55,000 and
A=$500
a. Determine the own price elasticity of demand, and state whether demand is elastic, inelastic, or unitary elastic.
b. Determine the price 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, and state whether good X is a normal or inferior good.
d. Determine the own advertising elasticity of demand.