The Schmidt Corporation estimates that its demand function is
Q = 400 - 3P + 4I + 0.6A
where Q is the quantity demanded per month, P is the product's price (in dollars), I is per capita disposable income (in thousands of dollars), and A is the firm's advertising expenditures (in thousands of dollars per month). Population is assumed to be constant.
a. During the next decade, per capita disposable income is expected to increase by $5,000. What effect will this have on the firm's sales?
b. If Schmidt wants to raise its price enough to offset the effect of the increase in per capita disposable income, by how much must it raise its price?

c. If Schmidt raises its price by this amount, will it increase or decrease the price elasticity of demand? Explain. Make sure your solution reflect the fact that elasticity is a negative number.