Question #1. Assume the following demand function for a good X: Qxd = 150 + ZAx- 3P; + .01M + 4P, Where Qxd is the quantity demanded of X, A, is advertising expenditure, Px Price of X, M is the average income, and Py is the price of other good Y. Suppose P): is 25 per unit, Py is 35 per unit, the company utilizes 50 units of advertising, and average consumer income is 20,000. Calculate and interpret: A. The price elasticity of demand for X. If P): reduces by 10% lower than before, what will be the total sale of X? B. Crossprice elasticity of demand. Is the good y substitute or complement? C. Income elasticity of demand. ls X normal or inferior goods. D. What is the quantity sold if the Good X is sold at the same price of Y? Hint: Note that elasticity can be expressed as: A p p . . . . Ed = E? =I= 3 = ax E, where ax IS the coeffICIent of Price. Use the same for others