Suppose the demand function for a firm’s product is given by ln QXd = 7 - 1.5 ln PX + 2 ln PY - 0.5 ln M + ln A where:
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 complements.
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.