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A firm has estimated the following demand function for its product: Qx = 258-2 Px + 0.101 + 1.0 Py + 14AX Where Qx is
A firm has estimated the following demand function for its product: Qx = 258-2 Px + 0.101 + 1.0 Py + 14AX Where Qx is the quantity demanded of X per month (in thousands). Py is the price of X, I is an index of consumer income. Py is the price of competing product Y. and Ax is the advertising expenditures for X per month (in thousands). Assume that Px = 10,1 = 120, P, = 10, and Ax = 10. The Income Elasticity of Demand (E) is: A 3 B 0.3 0.03 0.003
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