Managerial Economics & Business Strategy 8th Edition by Michael Baye,Jeff Prince

تمرين 10

The demand curve for a product is given by
where P z = $300.
a. What is the own price elasticity of demand when P x = $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?
b. What is the own price elasticity of demand when P x = $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?
c. What is the cross-price elasticity of demand between good X and good Z when P x = $140? Are goods X and Z substitutes or complements?