Robert Greenberg established Skechers Shoes company with more than 1000 locations all over the U.S. In 2021, the company hired a team of economists to estimate the daily demand for it's own brand Running Shoes along with other variables - the economist estimated the demand functions as follows:

Q = 100 - 3 P + 4 Py- 0.71 M + 0.95 Ax

Where

Q = the quantity of Skechers shoes demanded

P = the price of Skechers (in dollars)

M = the average income level (in dollars)

P = the price of Adidas Shoes (in dollars)

Suppose Skechers sells for $55 a pair, Adidas sells for $45, the company utilizes 50 units of advertising and average consumer income is $45,000. Using this information, answer the following questions:

a) Calculate and interpret the own - price, cross-price and income elasticities

b) For raising revenues, should this firm raise or lower the price? Why? Explain?

c) Is Adidas a substitute or complementary good? Why? Explain using the calculated cross-price elasticities.

d) Is Skechers a normal or an inferior good? Why? Explain

e) What is the impact of advertising on the sale of Skechers Shoes?

Explain.