the estimated generalized demand functions for good X is given below, Qd = 500-5px + 3py +
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Question:
the estimated generalized demand functions for good X is given below,
Qd = 500-5px + 3py + 0.25M + 1.8Ax - 0.1Ay
where,
px = price of good x (RS. 5.00 per unit)
py = price of good y (RS. 2.50 per unit)
M = income (RS. 500 per day)
Ax = advertising expenditure on good x (RS. 2.00 per unit)
Ay = advertising expenditure on good y (RS. 10.00 per unit)
calculate and interpret the point price elasticity of demand.
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