Suppose the own price elasticity of demand for good X is -6, its income elasticity is 3, its advertising elasticity is 5, and the cross-price elasticity of demand between it and good Y is 5. Determine how much the consumption of this good will change if:

a) The price of good X decreases by 6 percent.

b) The price of good Y increases by 9 percent.

c) Advertising decreases by 2 percent.

d) Income increases by 3 percent.

The demand curve for product X is given by QX d = 600 5PX. a) Find the inverse demand curve. b) How much consumer surplus do consumers receive when Px = $50? c) How much consumer surplus do consumers receive when Px = $40? d) In general, what happens to the level of consumer surplus as the price of a good falls? The level of consumer surplus increases or decreases as the price of a good falls.

A firm's current profits are $200,000. These profits are expected to grow indefinitely at a constant annual rate of 8 percent. If the firm's opportunity cost of funds is 10 percent, determine the value of the firm: a) The instant before it pays out current profits as dividends. b) The instant after it pays out current profits as dividends