Demand for enrolling in on-campus courses at LSUis estimated at Q_E = 2500 - 5Y - 40P_E - 200P_P, where Q_E is the number of students taking on-campus classes per semester, P_E is price per class, P_P is price of parking on campus, Y is average monthly earnings (income from work) of students. Initial values of prices and income are P_E = $10, Y =$200, and P_P = $5. Explain your work and answers.

a. Calculate price elasticity of demand for enrolling in classes on campus. Explain.

b. At the current enrollment demand, Q_E, on-campus classes are not at full capacity. The university wants to increase price per class, P_E, by 5 percent. What would you expect to be the change on quantity demanded, Q_E? What will be the change in total revenue from enrollment revenues (increase, decrease, etc.)?

c. How does enrollment demand, Q_E, change with a change in the price of parking on campus (i.e., cross-price elasticity of Q_E and P_P?) Suppose the university would like to increase enrollment by 10%? How much (in percentage terms) could the university change the price of parking? Explain.

d. Calculate the income elasticity of Q_E. Explain the impact of increased/decreased earnings potentials for students on Q_E.