Mom's Pretzels is a fairly small firm selling gourmet pretzels in a popular mall. As shop owner and operator, you have observed that your daily sales tend to follow a pattern that can be stated as:

Q = 800 - 130PP + 2A - 30Ps + 6I

where Q = unit sales of pretzels, PP = price of pretzels in dollars, A = advertising expenses, Ps = price of soda pop sold at your stand in dollars, and I = per capita income of customers inthousands of dollars. You are currently charging $2 per pretzel, spending $200 in advertising, charging $1 for a soda pop, and per capita income is $22,000.

a. Compute price elasticity, advertising elasticity, income elasticity and cross-price elasticity.

b. You are currently paying $1 to produce a pretzel (including cost for dough cost to bake, and wrapping). Is this the profit-maximizing price? Explain/show your math.