What does this demand sequence mean?
(I am assuming that x,y,and s are related products)
Qx=1.5 -3.0Px + 0.8(Income) +2.0 Py -0.6 Ps +1.2(Advertising)
Then a year passes and the values are:
Px=2
I=2.5
Py=1.80
Ps=0.50
A=1
Sample Questions:
a. Find Qx for this year?
b. Find the own-price elasticity of demand for product x. Is demand elastic or inelastic?
c. Find the cross price elasticity for Y. Are x and Y complements?
d. Find the cross price elasticity for S. Are x and Y complements?
e. Find the cross price elasticity for Qx. Are x and Y complements?
What is the best way to break this up to answer such as example? Our text book is very dense and does not explain how to plot these, just discusses concepts.