Question

The demand function for your brand X shirts is estimated as

Qd x   = 1,000 - 5 Px - 10 Py + 9 PZ+ 0 .001 I

The price of X is $ 10, Y is $ 4, Z is $ 10 and incomes are $ 20,000.

  

1) What are your sales? ______________

2) What is the elasticity of demand for X? _______________ ​​​​​

3) What is the cross elasticity between X and Z? ​​​​​   ______________

4) Are X and Z substitutes or complements? ​​​​​​   ______________

5) What is the income elasticity for X? ​​​​​​​   ______________

6) If incomes increased by $ 5,000, what would be the increase in sales of X? ​​   ______________

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Answer 1