Problem: In Qx = 3-0.5 in Px - 2.5 In Py + lnM + 2lnA
ln being natural log
Where
Px = $10
Py = $4
M = $20,000
A - $250
Q1) Determine the own price elasticity of demand and state whether demand is elastic, inelastic or unitary elastic
Q2) Determine the cross price elasticity of demand between good X and good Y and state whether these two goods are substitutes or compliments
Q3) Determine the income elasticity of demand state whether good X is normal or inferior
Q4) Determine the own advertising elasticity of demand.