Question: 1 ) Suppose demand for smart tablets is estimated to be Q = 1 0 0 0 5 p + 1 0 pa 2 pb

1) Suppose demand for smart tablets is estimated to be
Q =10005p +10pa 2pb +0.1Y
where p is the price of tablets, pa and pb are the prices of related goods, A and B, respectively. If
p =80,
pa =50,
pb =150, and
Y = $20,000.
a. What is the price elasticity of demand? Explain your result if the price falls by 3% and increases by 5%. Also discuss possible impacts of a price change on revenues in two-three lines.

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