l. (5 points) (a) The demand for good X has been estimated by Q x = 12 - 3Px + 4P;.-. Suppose that good X sells at $2 per unit and good Y sells for $1 per unit. Calculate the own plice elasticity. (b) The cross-price elasticity of demand for textbooks and copies of old exams is 3.5. If the price of copies of old exams increases by 10 percent, the quantity demanded of textbooks will change by what percent? Please show your calculations. (You should use the approach given in the section \"Obtaining Elasticities 'om Demand Functions\" in Chapter 3). 2. (5 points) Recently, Velizon Wireless ran a pricing trial in order to estimate the elasticity of demand for its services. The manager selected three states that were representative of its entire service area and increase prices by 5 percent to customers in those areas. On week later, the number of customers enrolled in Velizon's cellular plans declined by 4 percent in those states, awhile enrollments in states where the price were not increased remained at. The manager used this information to estimate the own price elasticity of demand and, based on her ndings, immediately increased prices in all market areas for the rm by 5 percent in an attempt to boost the company's annual revenue. One year later, the manager was surprised because Verizon's annual revenue were 10 percent lower than those in the previous year before the prices were increased --- the price increase led to a reduction in the company's revenue. What error did the manager make? Please give an explanation. 3. (5 points) Suppose a competitor lowers the plice of a good by 10% and that the plice elasticity of demand = -4, the cross price elasticity = +2, the advertising elasticity = +5 and income elasticity is = +1. (a) Assuming you are holding advertising and income constant, by what percent must you lower price in order to keep sales constant? Please show your calculations. (b) Now, assuming your price stays constant (you don't lower it as in "a" above), by what percent must the rm increase advertising spending in order to keep sales constant? Please show your calculations. You must calculate percent change and not the numelical amount of the change