Using regression analysis on data from a field experiment, the demand curve for a product is estimated to be QXd = 1,200 − 3PX − 0.1PZ where Pz = $300. a. What is the own price elasticity of demand when Px = $140? Is demand elastic or inelastic at this price? What would happen to the firm’s revenue if it decided to charge a price below $140? Instruction: Enter your response rounded to two decimal places. Own price elasticity: Demand is: . If the firm prices below $140, revenue will: . b. What is the own price elasticity of demand when Px = $240? Is demand elastic or inelastic at this price? What would happen to the firm’s revenue if it decided to charge a price above $240? Instruction: Enter your response rounded to one decimal place. Own price elasticity: Demand is: . If the firm prices above $240, revenue will: . c. What is the cross-price elasticity of demand between good X and good Z when Px = $140? Are goods X and Z substitutes or complements? Instruction: Enter your response rounded to two decimal places. Cross-price elasticity: Goods X and Z are: .
Using regression analysis on data from a field experiment, the
a. What is the own
Instruction: Enter your response rounded to two decimal places.
Own price elasticity:
Demand is: .
If the firm prices below $140, revenue will: .
b. What is the own price elasticity of demand when Px = $240? Is demand elastic or inelastic at this price? What would happen to the firm’s revenue if it decided to charge a price above $240?
Instruction: Enter your response rounded to one decimal place.
Own price elasticity:
Demand is: .
If the firm prices above $240, revenue will: .
c. What is the cross-price elasticity of demand between good X and good Z when Px = $140? Are goods X and Z substitutes or complements?
Instruction: Enter your response rounded to two decimal places.
Cross-price elasticity:
Goods X and Z are: .
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