The Demand Function and Elasticities 1. Suppose using household information we can estimate the following demand function: Qx = 60- 5Px 2.4 Py - 4Pz 10I where Qx = is the quantity of raincoats demanded during a one-year period measured in thousands of units, Px = the price of a rain coat, Py= price of a jacket, Pz represents the price of an umbrella, and I is the average annual income of prospective buyers, measured in thousands of dollars. Further, based on current information, we have the following values for prices and income: Px = $60, Py= $50, Pz = $20, and I = $40. a) Use the given values (above) for other prices (except for the price of raincoat) and income to calculate the following demand equation for raincoat using this format: Qx = A 1Px (Use the information to get the value for A and 1). b) At the current price for the raincoat, how many raincoats will be demanded c) Use the formula for point elasticity [( = (dQ/dP) x (P/Q)] and the information you have from above to calculate the point elasticity of demand, what does it tell you? d) Use the same information to calculate