18. After a careful statistical analysis, the Chidester Company concludes that the demand function for its product is

Q =150-2P + 0.5P_r + 0.03I,

whereQis the quantity demanded of its product,Pis the price of its product,P_r is the price of its rival's product, andI is per capita disposable income (in dollars).

At present,P= $15,P_r = $18, andI= $3,000. What is the price elasticity of demand for the firm's product?

A. - 0.1730.

B. - 0.1570.

C. - 0.1370.

D. - 0.1630.

E. None of the above.

19. Using the information in question #18, calculate the change in total revenue if the firm raises the price of its product from $15 to $20

A. an increase of $895.

B. a decrease of $895.

C. an increase of $219.

D. a decrease of $219.

E. None of the above.

20. Using the information in question #18, what is the income elasticity of demand for the firm's product?

A. 0.1730.

B. 0.411.

C. 0.0411.

D. 0.141.

E. None of the above.

21. Using the information in question #18, what is the cross elasticity of demand between its product and its rival's product?

A. 0.1730.

B. 0.411.

C. 0.0411.

D. 0.141.

E. None of the above.

22. Using the information in question #18, what is the implicit assumption regarding the population in the market?

A. Increasing.

B. Decreasing.

C. Constant.

D. None of the above.