Compute to three decimal places. (See attached)Initial values are: PX = $9500 PY = $10000 I = $15000 A = $170000 W = 160This function is: Qs = 89830 -40PS +20PX +15PY +2I +.001A +10W **Elasticity and Demand Analysis for Smooth Sailing Boats**1. **Advertising Expenditures and Demand Responsiveness** - **Question (a):** Does this elasticity coefficient indicate that the demand for Smooth Sailing boats is relatively responsive to changes in advertising expenditures? Explain why or why not.2. **Weather Conditions and Point Elasticity** - **Question (b):** Weather forecasters emphasize the importance of favorable weather days as a determinant of sailboat sales. Calculate the point elasticity of demand for Smooth Sailing boats, assuming $ P_s = \$9000 $ (thus $ Q_s = 101600 $ boats) and $ W = 160 $. The other variables and their values are provided at the top before question #1. The formula for calculating elasticity is: \[ E_A = \frac{\partial Q_s}{\partial W} \cdot \frac{W}{Q_s} \]3. **Income Changes and Demand Sensitivity** - **Question (c):** Does this elasticity coefficient indicate that the demand for Smooth Sailing boats is relatively responsive to changes in income? Explain why or why not.

Given equation Qs = 89830 -40PS +20PX +15PY +2I +.001A +10W Given values PX = $9500 PY = $10000…

Answered: Initial values are: PX = $9500…

Initial values are: PX = $9500 PY = $10000 I = $15000 A = $170000 W = 160 This function is: Qs = 89830 -40PS +20PX +15PY +2I +.001A +10W

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

100%

Compute to three decimal places. (See attached)

Initial values are: P_X = $9500 P_Y = $10000 I = $15000 A = $170000 W = 160

This function is: Qs = 89830 -40P_S +20P_X +15P_Y +2I +.001A +10W

**Elasticity and Demand Analysis for Smooth Sailing Boats**

1. **Advertising Expenditures and Demand Responsiveness**
- **Question (a):** Does this elasticity coefficient indicate that the demand for Smooth Sailing boats is relatively responsive to changes in advertising expenditures? Explain why or why not.

2. **Weather Conditions and Point Elasticity**
- **Question (b):** Weather forecasters emphasize the importance of favorable weather days as a determinant of sailboat sales. Calculate the point elasticity of demand for Smooth Sailing boats, assuming $ P_s = \$9000 $ (thus $ Q_s = 101600 $ boats) and $ W = 160 $. The other variables and their values are provided at the top before question #1. The formula for calculating elasticity is:
\[
E_A = \frac{\partial Q_s}{\partial W} \cdot \frac{W}{Q_s}
\]

3. **Income Changes and Demand Sensitivity**
- **Question (c):** Does this elasticity coefficient indicate that the demand for Smooth Sailing boats is relatively responsive to changes in income? Explain why or why not.

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