Suppose the demand function for a firm's product is given by lnQ_X^d= 7 - 1.5 lnP_X+ 2 lnP_Y- 0.5 lnM+ lnAwhere:

P_x= $15

P_y= $6

M= $40,000, and

A= $350

a. Determine the own price elasticity of demand, and state whether demand is elastic, inelastic, or unitary elastic.

Own price elasticity:

Demand is:

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unitary elastic

inelastic

elastic

b. Determine the cross-price elasticity of demand between goodXand goodY,and state whether these two goods are substitutes or complements.

Cross-price elasticity:

These two goods are:

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substitutes

complements

c. Determine the income elasticity of demand, and state whether goodXis a normal or inferior good.

Income elasticity:

Good X is:

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normal

inferior

d. Determine the own advertising elasticity of demand.