After a careful statistical analysis, the Chidester Company concludes the demand function for its product is
Q = 500 - 3P + 2Pr + 0.1I
where Q is the quantity demanded of its product, P is the price of its product, Pr is the price of its rival's product, and I is per capita disposable income (in dollars). At present, P = $10,
Pr = $20, and I = $6,000.
a. What is the price elasticity of demand for the firm's product?
b. What is the income elasticity of demand for the firm's product?
c. What is the cross-price elasticity of demand between its product and its rival's product?
d. What is the implicit assumption regarding the population in the market?