Problem $03-02$

Using regression analysis on data from a field experiment, the demand curve for a product is estimated to be $Q_x^d=1,200-3Px-0\mathrm{.}1Pz$ where $P_Z=$$$300.$

a$.$ What is the own price elasticity of demand when $P_x=$$$140?$ Is demand elastic or inelastic at this price? What would happen to the firm's revenue if it decided to charge a price below $$140?$

Instruction: Enter your response rounded to two decimal places.

Own price elasticity:

Demand is:

If the firm prices below $$140,$ revenue will:

b$.$ What is the own price elasticity of demand when $P_x=$$$240?$ Is demand elastic or inelastic at this price? What would happen to the firm's revenue if it decided to charge a price above $$240?$

Instruction: Enter your response rounded to one decimal place.

Own price elasticity:

Demand is: