All questions utilize the multivariate demand function, initially with:

P_Y = $300P_L = $1.50I = $40000A = $200000

This function is:

Q_X = 197000 -100P_X +50P_Y +.025I +.02A + 10000P_L

1.Use the above to calculate the arc price elasticity of demand between P_X = $250 and P_X = $200.The arc elasticity formula is:

2.Calculate the quantity demanded at each of the above prices and revenue that will result if the quantity is sold (fill in table below).

Px Q Revenue $250 $200