Te demand for good x is qxnbsp 10000 - 4pxnbsp 5pynbsp 2m

Question

The demand for good x is Q_x = 10,000 - 4P_x + 5P_y + 2M + A, where P_x is the price of x, P_y is the price of good y, M is income and A is the amount of advertising spent on x. Suppose the present price of good x is $50, P_y = $100, M = $25,000, and A = $1,000. The price elasticity of demand for good x is approximately:

a. -0.003.

b. -0.045.

c. -0.22.

d. -3.00.

e. None of the above.