Suppose that the demand equation for a firm’s product has been estimated as Qx = 100P-3.5I0.25, where P and I are price and income, respectively.

a. What, if anything, can you say about the price elasticity of demand for good X?

b. What, if anything, can you say about the income elasticity of demand for good X?

c. What, if anything, can you say about the relationship between the slope of the demand curve and the price elasticity of demand?

d. What, if anything, can you say about the effect of a price decrease on firm revenues?

e. How would your answer to part c be different if the demand equation had been linear?