Q_AW = -150,000 - 2400P_AW + 1520 P_G + 1200P_P - 1200P_iPhone + 44A

Where: Q_AW is the quantity of Apple Watches sold per week;

P_AW is the price of an Apple Watch in dollars per unit;

P_G is the price of Samsung Gear smartwatch in dollars per unit;

P_P is the price of the Pebble Steel smartwatch in dollars per unit;

P _iPhone is the price of an iPhone;

A is the quarterly advertising budget for Apple Watch in thousands of dollars.

Answer the following questions:

1. How many watches will Apple sell if; P_AW = $349, P_G = $380, P_P = $220, P_iPhone = $299, and A = $15,500?
2. What is the price elasticity of demand for Apple Watch?
3. What are the cross-price elasticities between the Apple Watch and the two other smart watches, Gear and Pebble?
4. What is the advertising elasticity for the Apple Watch?
5. Interpret the meaning of each of the elasticities you calculate.
6. What additional information would you need in order to determine if $349 is the appropriate price for the Apple Watch?