Question: Smooth Sailing: Inc.: has estimated the demand function for its sailboats (quantity purchased annually) as follows: QD = 89,830 40Ps + 20Px + 15Pv

Smooth Sailing: Inc.: has estimated the demand function for its sailboats (quantity purchased annually) as follows: QD = 89,830 40Ps + 20Px + 15Pv + 21 + O. OOIA + low ere: QD = quantity purchased: Ps = the price of smooth sailing sailboats: Px= the price of Company X' s sailboat: Py the price of Company Y' s motorboat: I = per caplta mcome m dollars: A = dollars spent on advertising, and W = number of favorable days of weather in the southern region of the United States. a) SupposethatPs 160_ Fmd the price elasticity of demand at that point. b) Is ED elastic: inelastic: or unitary elastic in part (a)? Justify'?

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