Topic: Elasticity of Demand

The demand for Product X is given by : 9-2 Px-Py +M

We are also told that Good X sells for $4 per unit, Good y sells for $2/unit and M= $3

1. Calculate the price elasticity of demand, the income elasticity of demand, and the cross price elasticity of demand with respect to good y. Then, write the demand equation
2. Graph the demand equation and total revenue graph. Indicate whether or not marginal revenues are positive or negative in that region (Please use graph to support answer)