3. The demand and supply functions for suitcases can be written as follows: Demand Xd=302Px+1.5Py0.2Pz+0.3R Supply Xs=4PX2Pp where Px is the price of the suitcases, Py is the price of travel bags, Pz is the price of airline tickets, R is income and Pp is the price of bovine leather. Initially, R=20,Py=4,Pz=10 and Pp=4. a) Obtain the arc price elasticity of the demand curve when P it passes from the equilibrium value associated with the previous values, hereinafter "initial equilibrium", to the new equilibrium value caused by the reduction of Pp, which becomes equal to 1. Represent both equilibriums graphically. b) Obtain the price elasticity of demand at the initial equilibrium point. c) Obtain the income elasticity of demand at the initial equilibrium point. d) Find the cross-elasticity of demand for X with respect to the price of good Y at the initial equilibrium point. e) Go back over the equilibria considered in a) and compare the firms' revenues (consumer spending). Justify the change in income based on the price elasticity of demand calculated in c). f) Evaluate the price elasticity of the original supply curve at the initial equilibrium point. 3. The demand and supply functions for suitcases can be written as follows: Demand Xd=302Px+1.5Py0.2Pz+0.3R Supply Xs=4PX2Pp where Px is the price of the suitcases, Py is the price of travel bags, Pz is the price of airline tickets, R is income and Pp is the price of bovine leather. Initially, R=20,Py=4,Pz=10 and Pp=4. a) Obtain the arc price elasticity of the demand curve when P it passes from the equilibrium value associated with the previous values, hereinafter "initial equilibrium", to the new equilibrium value caused by the reduction of Pp, which becomes equal to 1. Represent both equilibriums graphically. b) Obtain the price elasticity of demand at the initial equilibrium point. c) Obtain the income elasticity of demand at the initial equilibrium point. d) Find the cross-elasticity of demand for X with respect to the price of good Y at the initial equilibrium point. e) Go back over the equilibria considered in a) and compare the firms' revenues (consumer spending). Justify the change in income based on the price elasticity of demand calculated in c). f) Evaluate the price elasticity of the original supply curve at the initial equilibrium point