Viking InterWorks is a manufacturer that supplies memory products to original equipment manufacturers of desktop systems. The CEO read that the upcoming years projected demand for 512 MB desktop memory modules is Q^d memory = 20,000 - 80P memory - P desktip + 0.6M, Where P memory is the market price for 512 MB memory module, P desktop is the selling price of a desktop system, and M is consumer income.

a. Already did it.

b. What would be the impact on Viking InterWorks of a $2,116 increase in consumer income, accompanied by a $100 reduction in the price of desktops?

c. Calculate the income and cross price elasticities of demand when P desktop = $1,040, P memory = $520 and M = $50,384

d. A recent report indicates that the price of a memory 512 MB module would fall below $520 but remain above $307.44, other things remaining constant as in part (c) above. The CEO views this as favorable for Viking InterWorks. Use your knowledge of elasticity of demand and revenues to determine if you agree with the CEO.