# Question: A firm has estimated the following demand function for its

A firm has estimated the following demand function for its product:

Q = 10-2P+.20I+2A where Q is quantity demanded per month in thousands, P is product price, I is an index of consumer income, and A is advertising expenditures per month in thousands. Assume that P=$5, I=50, and A=10. Based on this information, select the correct values for: quantity demanded; price elasticity of demand; income elasticity of demand; and advertising elasticity.

Q = 10-2P+.20I+2A where Q is quantity demanded per month in thousands, P is product price, I is an index of consumer income, and A is advertising expenditures per month in thousands. Assume that P=$5, I=50, and A=10. Based on this information, select the correct values for: quantity demanded; price elasticity of demand; income elasticity of demand; and advertising elasticity.

## Answer to relevant Questions

Explain why the price elasticity of demand is negative. What would the price of demand be for a “prestige good,” one for which quantity purchased increases a price increases? How do you reconcile these two statements?Using elasticity, explain what “market power” means.Suppose the costs (in cents) per passenger-mile of operating a jumbo jet on flights of 1200 and 2,500 miles with 250, 300, and 350 passengers aboard is:a. What is the marginal cost of one more passenger on a 1,200 mile ...Explain what is different between firms in monopolistic competition and firms in oligopoly? What does this difference mean for prices and quantities and for economic profit.Some personal computer software is sold at special discounts to students. Other software is provided in a less powerful version for students. Why do publishers offer discounts to students? What is the purpose of developing ...Post your question